The Lord Chancellor: Leave of Absence

Lord Irvine of Lairg: My Lords, before business begins, I take the opportunity to inform the House that I shall be undertaking a ministerial visit to Paris on Tuesday 25th March and Wednesday 26th March when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

New European Constitution

Lord Blackwell: asked Her Majesty's Government:
	Whether they will make a commitment to holding a referendum as part of the ratification process for any treaty which gives effect to a new European constitution.

Baroness Symons of Vernham Dean: My Lords, a new constitutional treaty would need to be ratified according to the individual constitutional arrangements in each of the member states. This Government are committed to the existing system in the United Kingdom of parliamentary democracy rather than public referendums. Any new treaty would have to stand up to rigorous scrutiny by Parliament before the United Kingdom would ratify it.

Lord Blackwell: My Lords, I thank the Minister for her Answer. Can she confirm that the Prime Minister has already accepted a number of significant constitutional proposals put forward by this convention, including the recognition of a European legal entity with its own constitution and with significant additional powers that amount, in the words of the Prime Minister, to a transfer of sovereignty to Europe? Does she recognise that there is a case to be made that such constitutional issues are at least as important as a number of other matters on which the Government have chosen to hold a referendum, including devolution to the English regions and the question of the euro? If not, can she explain to the House how they differ? Finally, does she accept, as part of parliamentary scrutiny, that this House has a right and, indeed, an obligation at the right time to take a view on whether it is appropriate to insist on a referendum before any treaty is ratified?

Baroness Symons of Vernham Dean: My Lords, the noble Lord, Lord Blackwell, has had a good run for his money. I counted about five questions. A number of those issues are being considered, not only by my right honourable friend the Prime Minister but also by Mr Hain, who is leading the government side in the discussions on the Convention of Europe. The noble Lord is right in so far as a number of the constitutional issues under discussion are significant, but no more so than those dealt with under the treaties of Maastricht, Amsterdam and Nice and the Single European Act. There is no fundamental shift in the nature of the relationship that is being contemplated that Her Majesty's Government believe would be of such an order of magnitude as to merit a referendum. I have been responsible for taking a number of Bills of this nature through your Lordships' House. There is no shortage in this House of either enthusiasm or, indeed, expertise on these issues. I am sure that we shall see that exercised on this Bill.

Lord Lamont of Lerwick: My Lords, why, then, is a referendum justified for the single currency?

Baroness Symons of Vernham Dean: My Lords, the single currency is a once-in-a-lifetime decision. Noble Lords on the other side of the House cannot have it all ways. If the noble Lord felt that what may come forward under any new treaty is of such importance, he has to explain why when he was in government he did not advocate holding a referendum on the Maastricht Treaty.

Lord Rees-Mogg: My Lords, can the Minister explain to the House why, if the Government disapprove of referendums as being contrary to parliamentary democracy, they hold so many of them?

Baroness Symons of Vernham Dean: My Lords, we do not disapprove of referendums as such, but we exercise our judgment—in my mind quite rightly—as to when to hold such referendums.

Lord Goodhart: My Lords, in view of the fact that the convention is very much in draft form at present and it is far from clear how fundamental the changes will be when it is finally agreed, does the Minister agree that it is premature to consider at this stage whether there should be a referendum?

Baroness Symons of Vernham Dean: Yes, my Lords. I believe that is a point. Indeed, that was the judgment reached in judicial review held on this matter in the past few days. As matters stand, Her Majesty's Government do not believe that these matters significantly change the shift in a constitutional position in the way in which Europe organises itself to the extent that they merit a referendum on this issue. That is entirely different from what I described a moment or two ago as the once-in-a-lifetime decision on the euro.

Lord Howell of Guildford: My Lords, is the noble Baroness correct that merging our sovereign constitution with a higher constitution is no different from past treaty arrangements? Surely, this is a completely different order of treaty, which cries out for a referendum. Is she right in saying that these matters are only being considered when the communique from the Prime Minister's meeting with Mr Aznar last week agreed that there should be a new constitution for Europe? It is not being considered; it has been decided. Finally, does she not consider it extraordinary that your Lordships' House, which is supposed to be the guardian of the constitution, has had no full opportunity to debate this matter? Can she quickly send a message to her right so that we can have a debate in government time?

Baroness Symons of Vernham Dean: My Lords, in his usual skilful way, the noble Lord has also managed to ask a great number of questions. There has never been any doubt that we were looking at what the noble Lord has described as a constitution for Europe. The Government made that clear from the beginning. However, in such a constitution we are looking to simplify and clarify what is already in the treaties. We have discussed that as well. The noble Lord says that the issue is of such an order of magnitude that it merits consideration in a referendum. I do not think that it is of any greater order of magnitude than what was discussed in the Maastricht Treaty, which included the laying down of the stages for progress towards economic and monetary union, to come back to the point about the euro raised by the noble Lord, Lord Lamont, citizenship of the Union, and extending Community action in at least eight different fields. If that was not a matter for a referendum, when the Conservative Party had the ability to decide whether to hold one, I do not see why it is so keen when it is out of office to urge one on us.

Lord Barnett: My Lords, given how few people inside or outside the House will have the faintest understanding of the five economic tests, would it not be sensible to cancel that referendum?

Baroness Symons of Vernham Dean: My Lords, we are committed to a referendum on the euro. I am very pleased that my noble friend has raised the five economic tests. My right honourable friend the Chancellor will give us the benefit of his considerable expertise on those five tests: on convergence, on the effect on investment in the UK, on flexibility of the economy, on the position of the City and on employment. Those are all very important issues that people will have to take into consideration if and when there is a referendum on the euro.

Lord Elton: My Lords, in the light of what the Minister has said about orders of magnitude, does she not find it at least a little strange that the Government should require a referendum to decide whether there should be regional government for one of the English regions but not to decide whether the whole of the United Kingdom should be locked into Europe in a constitution that is a different expression from what has been put in the treaty?

Baroness Symons of Vernham Dean: My Lords, the noble Lord poses his question in terms that I would not use about Europe. We have been considering a whole new tier of government for the regions. It is right that those directly affected, who would be able to vote for that new tier of government, should be consulted.

Yorkshire: Unemployment Rates

Lord Hardy of Wath: asked Her Majesty's Government:
	By what proportion unemployment has fallen in the county of South Yorkshire and in the Yorkshire region in 2002 and since 1997.

Baroness Hollis of Heigham: My Lords, in the Yorkshire and Humberside region, claimant unemployment has fallen by 48 per cent—nearly half—since 1997. In South Yorkshire, unemployment has fallen by 53 per cent—more than half—since 1997. Employment and unemployment rates in the Yorkshire and Humberside region are similar to the UK average. Every local authority district in that region has an employment rate above the EU average.

Lord Hardy of Wath: My Lords, I thank my noble friend for that welcome reply. Would she care to comment on the fact that, while the progress in the county as a whole has been very good, it has been particularly so in the hardest hit areas, such as in the nine parliamentary constituencies comprising the metropolitan boroughs of Barnsley, Doncaster and Rotherham? Given that advance, does my noble friend consider that it would now be appropriate to give higher priority to tackling the social consequences of the economic devastation that the area experienced in the 1980s?

Baroness Hollis of Heigham: My Lords, I join my noble friend in welcoming the progress that has been made in the area. I am sure that my noble friend is aware that in 1992 the unemployment figure for Yorkshire and Humberside was 250,000. It is now 85,000. That figure has fallen to a third of its previous level. That is true across almost the entire UK, accompanied again by redundancy rates at half their level of the early 1990s and other factors. My noble friend is right that, having built up the economic prosperity of South Yorkshire, aided by the New Deal, employment zones, action teams, step-ups, work pilots and the like, we must turn to building up the social and environmental infrastructure.

Lord Mason of Barnsley: My Lords, those were heartening replies for those who live in Sheffield, Doncaster, Barnsley and Rotherham. As the House is aware, they suffered terribly from the pit closure programme. The unemployment figures have been awful. To what extent has the European regional development fund helped to secure jobs? Is the coalfield communities regeneration programme proving successful? Finally, South Yorkshire has now received Objective 1 status, which shows that it is still one of the poorest regions in western Europe. How will that help?

Baroness Hollis of Heigham: My Lords, my noble friend has raised the situation of the coalfields communities previously. He is right about that. Objective 1 funding is a combination of the European regional development fund, the European Social Fund and some funding from the Department for Environment, Food and Rural Affairs. Put together, that Objective 1 funding allocates to South Yorkshire £1.8 billion between 2000 and 2006 to help make an impact on the economy. It is being spent on projects such as the New Deal. Together with the coalfield communities regeneration project, it is also being spent on progress to work in places such as Barnsley, which is helping unemployed recovering drug misusers, a minority ethnic outreach programme in Leeds and Bradford and the like. The money is being used to target those groups who are most distanced from the labour market, as well as seeking to regenerate the social and environmental infrastructure.

Lord Higgins: My Lords, what proportion of the increase in employment in this area is in the public sector, as against the private?

Baroness Hollis of Heigham: My Lords, I cannot tell the noble Lord that. However, as a result of our public expenditure via the New Deal, lone parent and youth unemployment statistics are much more satisfactory than they would otherwise have been. I do not have the figures for public sector employment in South Yorkshire.

Lord Smith of Clifton: My Lords, the Minister referred to social regeneration in South Yorkshire. Will she give some specific examples of how that might be achieved, as it is a grievous area in terms of social deprivation? I fear that it may be a breeding ground for more extremist politics.

Baroness Hollis of Heigham: My Lords, the noble Lord is right. At the core of the problem is conventional unemployment. The noble Lord mentioned extremist politics. It is certainly case, as some of us said last night when debating the social security up-rating statement, that the gap in regional prosperity is not particularly a gap between north and south, but that there is a north and south divide in many cities, which particularly affects ethnic minorities in many communities.
	The figures for the North West, the North East, Yorkshire and Humberside show that unemployment is down to one third of what it was in 1992 in those areas. However, in more than half the regions, ethnic minority employment has not only not improved but has actually got worse during the past decade. The noble Lord is right to remind us that such areas are a breeding ground for extremist politics of all colours.

Lord Dormand of Easington: My Lords, is the Minister aware that, despite all that the Government have done and are doing, the northern region continues to have the highest regional rate of unemployment in the country? As there is normally a link between long-term unemployment and ill health, will the Minister say what the position is in the northern region?

Baroness Hollis of Heigham: My Lords, we do not collect statistics for the northern region as such, but we have them for the North West and the North East. I assume that my noble friend is especially interested in the North East. The statistics for that area show that, whereas unemployment in 1992 stood at 148,000, it is now down to 54,000, which is one-third of what it was. We are seeing the same pattern in that region as in the rest of the country: not only is unemployment coming down but the regional disparities are narrowing. None the less, there is still some way to go, as we can see from house prices and wage rates.

Baroness Blatch: My Lords, much of what the Minister says is welcome. However, does she accept that the programmes for economic regeneration and safer cities, the City Challenge and City Action programmes, and the introduction of the Single Regeneration Budget made quite a contribution in areas such as Tyneside, Teeside, Liverpool, Manchester, Don Valley, Leeds, Plymouth and many other parts of the country including the Docklands? When the Minister's Government came into office, unemployment was falling in all those areas.

Baroness Hollis of Heigham: My Lords, I would not disagree for a moment. I am glad that the noble Baroness welcomes the significant achievements made since not only 1992 but 1997. She is right: at the end of the day, environment as well as jobs is crucial. When I was in opposition, I read some reports from the previous Conservative government, which showed that the growth in capacity must be locally owned and bottom up. That means local authorities and others going down to ward level. One needs to build that capacity so that, when the funding is taken out, the initiatives do not dry up.
	There are various stories in that regard. In the Docklands, there may be more of a question mark about the success of local ownership than there is in some northern regions. As a philosophy, however, I agree with the noble Baroness that the process must be bottom up. One needs to do more than simply reduce unemployment figures.

Police Constables: Passing Out Parades

Baroness Harris of Richmond: asked Her Majesty's Government:
	Whether the pass-out parades of probationer police constables held at police training centres should continue.

Lord Bassam of Brighton: My Lords, traditionally, passing out parades have been seen by the police service as a way for new police recruits to celebrate the completion of their initial training with their peers, parents, loved ones and friends. New constables will genuinely appreciate a formal recognition of their achievement and commitment. Passing out parades are one way in which to fulfil this need, and they work well when they are enjoyed by those taking part and focus on the serious side of operational policing.

Baroness Harris of Richmond: My Lords, I thank the Minister for his response. Will he ensure that, if the marching part of parades is replaced, it is replaced with an appropriate and fully ceremonial occasion that marks the rite of passage of a police officer entering the police service? Will he also ensure that they continue to be undertaken at the police training centres?

Lord Bassam of Brighton: My Lords, it is very much up to the police training centres to decide how they wish to conduct passing out parades. In the past year, some 70 parades were undertaken in seven locations. The Metropolitan police service held 11 at Hendon in that time.
	I agree that parades are an important rite of passage, and it is clear that police training recruits greatly enjoy them, as do their family and friends. The Home Office has no intention of wishing them to come to an end, but they need to be modernised and must be appropriate. We welcome the contributions that have been made towards ensuring that is the case.

Lord Condon: My Lords, is the Minister aware that in most training centres the recruits use their spare time and off-duty time to prepare for passing out parades? They and their families draw enormous pride from the effort and smartness that they put into these occasions. The local community is usually heavily involved in celebrating the passing out of new recruits.

Lord Bassam of Brighton: My Lords, I am sure that the noble Lord knows far more about the parades than I could ever know. I am aware how recruits participate in the parades, and how they make a personal commitment in their own time. On the two occasions on which I went to training schools to see passing out parades, I was impressed by their commitment and enthusiasm.

Earl Ferrers: My Lords, does the Minister realise that his answer gives great pleasure, when he says that the Government do not intend to do away with passing out parades? Will he confirm that there is no thought that they may replace the marching part of passing out parades, which is part of the spectacle? I think that is what lay behind the supplementary question asked by the noble Baroness.

Lord Bassam of Brighton: My Lords, as far as I know, there is no intention to dispense with the marching part of the parades. Clearly, it is for the training schools to decide what is appropriate. Having heard what noble Lords have said, I welcome the enthusiasm and contributions made to recognising the importance of these celebrations of achievement.

Lord McNally: My Lords, does the Minister agree that the health and effectiveness of our police service demand that there should be a large proportion of faces of a different colour in those passing out parades, and that there should be increased recruitment from ethnic minorities? How are the Government progressing in encouraging greater recruitment from ethnic minorities?

Lord Bassam of Brighton: My Lords, the noble Lord is probably aware that when the Government came into office in 1997, we set targets for each force to ensure that the issue was focused on. I do not have the statistics in front of me, but my understanding is that we are making progress on the matter, as well as ensuring an appropriate gender balance.

Lord Geddes: My Lords, I am glad to hear the Minister refer to these ceremonies as passing out parades, not as "pass-out parades", as it says on the Order Paper, which sounds like a period of unconsciousness.

Lord Maginnis of Drumglass: My Lords, is it not a fact that, at a difficult time for the police, we should not underestimate the importance of camaraderie and discipline? Passing out parades have much to do with that. Parliament and the Government should do nothing to undermine that camaraderie and discipline if our police are to be able to withstand many of the pressures that they will face when they come on to the streets.

Lord Bassam of Brighton: My Lords, the noble Lord speaks with great sense. Clearly, esprit de corps is extremely important.

Cyprus: British Sovereign Bases

Lord Howell of Guildford: asked Her Majesty's Government:
	Whether it is still their belief, as stated in the Official Report of 14th January (HL Deb, col. 124), that the accession of Cyprus to the European Union will not affect the arrangements that have been worked out for the British sovereign bases.

Baroness Symons of Vernham Dean: My Lords, on 26th February, the United Nations Secretary-General formally tabled the third and final version of his proposals, which included the United Kingdom's offer to the United Nations to cede just under half the SBA territory if there is agreement on the UN proposals within the UN timetable. My right honourable friend the Foreign Secretary announced that in a written statement on 25th February. If agreed, the proposals would make no difference to the arrangements in the protocol in Cyprus's accession treaty, which will be signed on 16th April, or to the operational capability of the SBA.

Lord Howell of Guildford: My Lords, I am very grateful to the noble Baroness for that reassurance. Will she accept that we on this side strongly support any moves that may lead to the unity, at last, of the divided island of Cyprus? However, will she confirm that if this area of land which is now on offer was operational beforehand, the operational requirements—particularly in relation to water supplies and acting as a buffer zone—are no longer relevant, and that we can therefore safely go ahead with this offer should it be needed?

Baroness Symons of Vernham Dean: My Lords, I thank the noble Lord for his support—indeed, I think that in discussing this matter last March he said that anything that managed to achieve agreement would be something of a miracle. We very much hope that the proposals will receive support. I hope that he will be reassured to know that the MoD was, of course, fully consulted about the offer. It has said that the proposals do not make any difference to its operational capability or, I understand, to the availability of water supplies.

Lord Corbett of Castle Vale: My Lords, perhaps I may congratulate Her Majesty's Government on making this offer as a contribution to trying to achieve a settlement between both Cypriot communities. Can my noble friend say what the latest prospects are for a settlement within the timetable laid down by the United Nations? Does she agree that unless both Cypriot communities and those representing them seize this opportunity now, it may well be a decade or more before they get another chance?

Baroness Symons of Vernham Dean: My Lords, I thank my noble friend for his congratulations. I believe that this is good news. It has been a creative and carefully timed initiative on the part of the British Government. It is, of course, made in strong support of the efforts made under the auspices of the Secretary-General. It is therefore part and parcel of trying to give support to the United Nations.
	I should say something about the timetable. I understand that Mr Denktash is in Ankara discussing the proposals this afternoon. Both sides have been asked to give an indication to the Secretary-General about whether they will hold referendums by 10th March. We very much hope that both sides will feel that there is sufficient to go on to hold those referendums on 30th March. I agree with my noble friend. We very much hope that this matter can at last be settled.

Lord Wallace of Saltaire: My Lords, does the Minister accept that some of the sovereign base areas have been surplus to requirements for some time, so that returning some of the land to Cyprus would not be a tremendous loss to the British Crown? Can she also tell us a little about how it will be done? Does it have to be ratified by Parliament, or does it, like other matters, come under the Royal prerogative?

Baroness Symons of Vernham Dean: My Lords, as I indicated in answering the noble Lord, Lord Howell, I am assured that the military capability will not be diminished. The noble Lord, Lord Wallace, therefore deduces that they have not been vital to that capability. I think that common sense shows that that is almost certainly the case. He went on to ask how this will be dealt with in Parliament. As I understand it, this—not the issue of giving away the sovereign base land, but eventually the issues about accession and all the issues we have discussed before—will be a matter for Parliament to consider. If I am wrong about that, I will write to the noble Lord.

Regional Assemblies

Baroness Blatch: asked Her Majesty's Government:
	Whether it is appropriate for public money to be used to campaign for regional government in advance of a decision to hold a regional referendum.

Lord Rooker: My Lords, the government grant to regional chambers may not be used for political purposes, including campaigning for an elected regional assembly. That is a condition of grant about which we have reminded the chambers. We are satisfied that regional chambers are not using government grant in that way.

Baroness Blatch: My Lords, it is known to the department that money coming from local government is in fact being spent in some parts of the country to campaign for regional assemblies—a proposal that has yet to go before Parliament and receive Royal Assent. Are the Government not concerned that that directly breaches the code of practice set out in the Local Government Act 2000?

Lord Rooker: My Lords, I understand what the noble Baroness is saying, and it is true, but that is a matter for the independent district auditor and not for the Government. I understand that the district auditor has been contacted on at least one occasion, perhaps more. The district auditor must draw his own conclusions; it is not a matter for the Government. We are satisfied that central government money is not being used inappropriately. We have also reminded the chambers of the position.

Lord Tordoff: My Lords, does the Minister agree that in order to have a sensible discussion it is essential to get the maximum amount of information to the electorate before the referendum is held? Is he not also surprised to find that this topical Question is really not a topical Question?

Lord Rooker: My Lords, given that the Bill is currently before the House, there are plenty of opportunities to raise these issues—as there was in another place. I understand that the allegations made in another place were answered satisfactorily, both in writing and in Committee, by the Minister concerned. No one has sought to say that the information given by the Minister was inaccurate.
	I repeat that the regional chambers are voluntary bodies and get their money from different sources. We have repeatedly said that the government grant is not for expenditure on activities of a political or exclusively religious nature—for example, campaigning, publicising or promoting the case for an elected regional assembly. It is not appropriate to use government money for those purposes. It is for the regional chambers to decide what to do with the other money they get. If there is a complaint about the money they receive from local government, the complaint should be made to the district auditor, not government Ministers.

Lord Renton: My Lords, is it not clear from the answer that the noble Lord has just given that regional government will have to be paid for by the people in each region? Should they not therefore be consulted before they have to accept that commitment?

Lord Rooker: Yes, my Lords. I return to the initial Question. The precise purpose of the referendums is to decide whether regional government comes to an area. The purpose of the legislation currently before the House is to determine whether referendums in advance of a decision should take place. The people in the region will choose whether to have an elected regional assembly. It is for them to decide whether to call it regional government or home rule. They will be elected regional assemblies, and that is that.

Lord Morgan: My Lords, does the Minister accept that there is considerable enthusiasm for the Government's initiative on regional government in many parts of the country; that it is seen as the natural corollary of Welsh and Scottish devolution; that it bears on the earlier Question on regional economic disparities; and that there would be even more enthusiasm if there were a statement on the powers and functions of the assemblies prior to the referendum?

Lord Rooker: We could do that, my Lords. However, I think that the penny dropped during Second Reading of the legislation that there are no new powers and no new funds. That causes disquiet in certain areas. There is an argument for and an argument against. That argument is for the regions after the House, if it so desires, passes the legislation and work continues on the local government changes. It is a complicated matter. We have made it clear that there will be a full government statement on what people are voting for, and the consequences of so voting, before they take part in a referendum.

Lord Roberts of Conwy: My Lords, is the Government's policy on regional referendum to hold them only when they will be won?

Lord Rooker: No, my Lords. We shall return to this point. The soundings aspect of the legislation concluded on Monday. The purpose of which was to see whether there was a desire in the regions for a referendum. Some people may want a referendum in order to defeat the proposal, as that would put it on the back burner for five years. As the legislation says, a defeat would kill the proposal stone dead for five years. The question is whether a region wishes to express an opinion for or against. That is how we will choose which region or regions will be first to have a referendum. As I think we have made clear, we do not expect that there will be more than one or two such regions before the next general election. The Bill has yet to be considered in Committee and on Report. I assume that these matters will be debated at length at that time.

Lord Waddington: My Lords, in the event of the Secretary of State ordering a referendum in the North West and that referendum resulting in a no vote, can I have an assurance from the Minister that the cost attendant on the abortive local government reviews will be borne entirely by the Secretary of State and not by the council tax payers in the counties of Lancashire and Cheshire where there is virtually nil support for regional government?

Lord Rooker: My Lords, I cannot answer the specifics of that question. However, I invite the noble Lord to table an amendment in Committee. By then I shall have a considered response to the question.

Baroness Hanham: My Lords, in view of the lack of information available about the powers and structures of regional government, will the Minister say on what basis the Secretary of State will make his decision, following the sounding exercise which finished on 3rd March and well before the Bill receives Royal Assent, about the level of interest in a region with regard to a referendum?

Lord Rooker: My Lords, I do not want to fudge the issue but these matters will be discussed at Committee stage of the Bill. At Second Reading we made clear that the Secretary of State would have to reach a considered judgment on whether there had been a sufficient level of interest in a particular area to justify a referendum, which would probably involve a year's work on the local government boundary review and a large expenditure commitment. The Secretary of State would have to reach a judgment having taken account of the relevant soundings. No decision will be made or announced until after the legislation receives Royal Assent. It is not possible to prejudge the soundings in a particular area during the passage of legislation through Parliament. It would be quite wrong to do so until Parliament agrees the legislation.

Lord Tebbit: My Lords, why were Members of this House not included on the distribution list of pro forma for responses to the sounding exercise on the level of support for referenda concerning this matter?

Lord Rooker: Because, my Lords, we made a cock-up for which I have apologised to the Front Benches.

Lord Tebbit: My Lords, I congratulate the Minister on his frankness if not on his parliamentary language. I am grateful to him.

Baroness Blatch: My Lords, I take the noble Lord back to my Question which is not about government money but about public money. I quote from the code of recommended practice of local authority publicity pursuant to the Local Government Act 2000 which states that,
	"local authorities, like other public authorities, should not use public funds to mount publicity campaigns".
	Does not the department take a view about public funds being used to promote a proposal that has yet to receive parliamentary and sovereign approval?

Lord Rooker: My Lords, I cannot help but draw the noble Baroness's attention to the fact that she altered the wording of the Question after she first tabled it. When it first appeared in my department late yesterday afternoon, it referred to taxpayers' money. That phrase was later altered to public money. There is a difference. I take the phrase "taxpayers' money" to refer to national taxpayers' money; that is, money under the Government's jurisdiction. The term "public money" includes money under the jurisdiction of local government. We have a policy—I am aware that some people disagree with it—of providing as much quasi independent local government as possible in this country without too much interference from central government. There is a tried and tested procedure of the district auditor levying onerous penalties if local government steps out of line. I repeat that if the money that the assemblies have obtained from local government is considered to be misspent, the correct person to whom to complain is the district auditor who will take a dim and severe view if they have overstepped the mark.

Lord Pearson of Rannoch: My Lords, on the now famous forms which have been issued for people to express their view on whether or not they want a regional assembly, is it true that if they state that they do not want a regional assembly and do not want a referendum, that counts as interest in a referendum and will therefore help to procure one? If so, that seems unacceptable.

Lord Rooker: My Lords, I do not know whether the noble Lord was present at the debate during which the matter was raised. I believe that the form has seven "tick" boxes. Some people also expressed their views in letters. It has been alleged that we took account of the views expressed in those letters rather than the boxes that had been ticked on the forms. I believe that we have stated that we have not done so. I appreciate that it is not an easy matter to assess, certainly not in seven tick boxes. The soundings have gone much wider that that.
	The Secretary of State will have to reach a judgment as to whether there is sufficient interest in a region to justify holding a referendum. Once that decision is made, subject to the Bill receiving Royal Assent, nothing will happen for a year as the boundary review will have to consider the relevant local government structure. It is important for people to know about the form of unitary local government. The two things go together. No unitary local government means no elected regional assemblies. It is as simple as that. We have made that clear. It will take about a year for that to happen. Therefore, there will not be any referendums or decisions on referendums to trigger the political parties legislation until the summer of next year.

Business of the House: Recess Dates

Lord Grocott: My Lords, with the leave of the House, I wish to make a short Statement about Recess dates.
	This morning my right honourable friend the Chancellor of the Exchequer announced the date of the Budget, which is to be Wednesday 9th April. In the light of that, it is expected that the Commons will not rise for Easter on Thursday 10th April, as provisionally planned, but will now sit until Monday 14th April.
	Noble Lords will naturally wonder whether that will affect our Recess dates. The answer is no. My intention is still as it was when I made an announcement last November; namely, that we should rise on Thursday 10th April and return on Monday 28th April. But I must emphasise, as ever—as everyone in my situation always says—that this is subject to the progress of business.
	For the Whitsun Recess, the House can still expect to rise on Thursday 22nd May. It is, however, likely that we shall be back on Monday 2nd June rather than Tuesday 3rd June.
	Following the decision of the House on 25th November to sit in September, many noble Lords have, not surprisingly, asked me precisely which two weeks we shall sit in September. I accept, of course, that people want to book holidays. I am able to announce today that, subject to the progress of business, we shall sit for the same two weeks in September as the Commons; that is, from Monday 8th September to Thursday 18th September.
	As your Lordships know, I have tried to give provisional Recess dates as far in advance as possible so that, for example, I was able to announce as early as 18th November last year the Whitsun Recess on 22nd May this year. The response I have had from Members—I am sure that noble Lords will agree that this is important—and from the staff of this House who serve us so well, has been that giving dates as far in advance as possible has been greatly appreciated. For me this has been almost a unique experience in that, for the first time in my political life, I appear to have done something which seems to be universally supported.
	I am aware that in making the September announcement today I have left uncertain precisely when we shall rise in mid-July, and when we shall return in October. I assure your Lordships that I shall provide those dates as soon as I possibly can.

Lord Cope of Berkeley: My Lords, I am sure that all noble Lords will wish to thank the Government Chief Whip for his confirmation that the Budget does not affect the business of this House and that its date need not concern us. We all appreciate that all the announcements on this matter are subject to the progress of business.
	Your Lordships will have noted that the Whitsun Recess will now be a day shorter for your Lordships' House than for the Commons. The noble Lord referred to mid-July but declined to define it. Does he agree with me that, arithmetically, 17th July, when the Commons will rise, is after the middle of July? Monday 21st July is certainly after mid-July.
	The time between 18th September and 14th October is apparently known in another place as the "conference recess". I fully understand that the September dates mean that the Labour Party and the Liberal Democrats will be able to go to their party conferences, but it would be very difficult if any dates that the noble Lord might announce in future were to discriminate against the Conservative Party conference.

Baroness Carnegy of Lour: My Lords, if the Budget is on 9th April, it strikes me that the subsequent four-day debate in another place will take place during the three-week campaign for elections to the Scottish Parliament. Although the economy is not devolved to that parliament, it is clearly impossible to separate the economy there from devolved matters, or from the person who happens to be the Chancellor, Mr Brown. Do the Government think the timing appropriate, and if so why?

Lord Roper: My Lords, we support what has been said about our gratitude to the noble Lord, especially for the fact that he has announced the September dates. Those mean that we on these Benches will be able to attend our party conference in September. However, it would be extremely helpful in terms of booking holidays in the summer if we could have that date—presumably 17th July, the same as the Commons—as soon as possible.

Lord Grocott: My Lords, I shall deal first with the question from the noble Lord, Lord Cope, about the Whitsun break. I was quite precise in my use of language when I made my Statement in November. I said that the Whitsun break might or might not include the Monday, depending on the progress of business. That is precisely how matters stand. I do not think that the noble Lord would expect me to be able to say any more than that.
	So far as concerns the noble Lord's definition of mid-July, I was honest enough to say that mid-July was not a precise date. I was well aware of that. I have not fed information into a computer to discover when mid-July begins and concludes. I can only reaffirm that it is my clear intention to announce to the House as soon as I can, subject to the progress of business, when the Summer Recess will begin. The progress of business is very dependent on three or four of us working as we normally do.
	I had not always detected tremendous enthusiasm for attendance at all party conferences to which the noble Lord referred. However, he will be aware that the date of return in October has varied from year to year. It has not always been possible to accommodate the needs of attendance at party conference. None the less, I shall give the date as soon as I can.
	I was asked about the date of the Budget and its effect on campaigning, at whatever level. As the noble Lord reminded us, the date should not affect this House directly, because we do not have a Budget debate in the same way as in the Commons. In the normal way, a Budget debate and all that is associated with it is something to which all parties have equal opportunity to contribute. It will no doubt be debated in all parts of the United Kingdom, as it normally is. It should not directly affect campaigning in the way suggested.
	I appreciate the welcome of the noble Lord, Lord Roper, for my early announcement about a number of dates. I simply reiterate that as soon as I am able to give precise dates about any of the outstanding ones, I shall certainly report them directly to the House.

Lord Forsyth of Drumlean: My Lords, I do not want to detain the House, but I want to follow up the answer to the question asked by my noble friend Lady Carnegy of Lour. Have the Government abandoned the convention held by successive governments that major announcements of policy are not made during the course of a parliamentary election campaign? The Budget is a major announcement of government policy, and it will take place during a parliamentary election campaign. Surely that is a serious matter. Is the Civil Service content to see that? In my day, the Permanent Secretary would have gone berserk at the notion that we would make major policy announcements during an election campaign in Scotland.

Lord Grocott: My Lords, the process of government does not come to a complete standstill during election campaigns, as is well known, and the dates of the sitting or non-sitting of either House of Parliament are not directly affected. When the normal parliamentary processes continue, inevitably there will be discussion, announcements and Statements. I agree entirely that care is taken about the way in which the language of government statements is delivered, but the noble Lord is surely not suggesting that the Chancellor of the Exchequer should not have the normal freedom to determine the date on which it is appropriate to make his Budget Statement. It would certainly be an odd precedent if that were established.

Baroness Blatch: My Lords, when deciding on which date the House rises in July, will the noble Lord bear in mind the words of his colleague the noble and learned Lord the Leader of the House when successfully persuading the House to vote for the shape of the new parliamentary year? He said that there would be compensatory time off in July, so that the House was not required to sit extra days as a result of voting to return in September. That comment is on the record.

Lord Grocott: My Lords, what is clearly on the record is the resolution that the House passed last year. It states:
	"That it is the opinion of this House that, subject to the requirements of business, in 2003 the Summer Recess should begin not later than the middle of July and the House should sit for two weeks in September".—[Official Report, 25/11/02; col. 565.]
	That is the resolution that binds me and everyone else. The language is quite precise.

Baroness Strange: My Lords, would the Minister not agree that St Swithin's Day, 15th July, has traditionally been considered the middle of July?

Lord Grocott: My Lords, even more importantly, 15th July is my wife's birthday.

Business of the House: Debates this Day

Lord Williams of Mostyn: My Lords, I beg to move the first Motion standing in my name on the Order Paper.
	Moved, That the debate on the Motion in the name of the Lord Fowler set down for today shall be limited to three hours and that in the name of the Baroness Park of Monmouth to two-and-a-half hours.—(Lord Williams of Mostyn.)

On Question, Motion agreed to.

Travel to European Union Institutions and National Parliaments

Lord Williams of Mostyn: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
	After representations from Peers from all parties, I have been in correspondence with the Senior Salaries Review Body. I have requested that it recommend a new allowance to enable Members of the House to claim reimbursement of travel and subsistence expenses for up to two return visits per year on parliamentary business to European institutions in Brussels, Luxembourg or Strasbourg, and to the national parliaments of EU member states or EU candidate countries. The SSRB has agreed to my request. The new allowance is broadly in line with a similar allowance in the Commons.
	If noble Lords agree to the resolution, from 1st April this year they will be able to claim reimbursement for European Union travel along the lines that I have outlined. It is very important that the scheme is properly run and administered. For that reason, it will be necessary for all Members of the House wishing to make use of the allowance to seek prior approval from the Clerk of the Parliaments. The House Committee is likely to consider the details of the implementation and administration of this allowance at its next meeting.
	Moved to resolve, That, in the opinion of this House, provision should be made as from 1st April 2003 for reimbursing Lords in respect of the cost of travelling on parliamentary duties between the United Kingdom and any European Union institution in Brussels, Luxembourg or Strasbourg or the national parliament of a European Union state or a candidate country and any additional expenses necessarily incurred in connection with such travel, subject to the following conditions—
	(a) for any Lord, reimbursement is for not more than two visits in any year beginning with 1st April;
	(b) the amount payable in respect of travel out of and into the United Kingdom is not more than the business class return fare between a station or airport serving London or the area of the Lord's main residence and a station or airport serving the city visited;
	(c) subsistence for each visit is limited to two nights at the Foreign and Commonwealth Office class A standard subsistence rate for the time being in operation;
	(d) the Lord must submit in advance to the Clerk of the Parliaments a statement of the visit's purpose, location and duration and the persons or organisations to be met.—(Lord Williams of Mostyn.)

Lord Roper: My Lords, from these Benches, I welcome the efforts of the noble and learned Lord the Leader of the House in achieving this result. It has been a matter about which we have had some concern for some time and I am delighted that we are now put, broadly speaking, on the same basis as Members of the House of Commons and will be able to carry out appropriate travel.

Lord Hardy of Wath: My Lords, I disagree slightly with the noble Lord, Lord Roper, and my noble and learned friend. The facility is to be welcomed but it is not the same as that which is available in the House of Commons. I shall explain that briefly.
	One will be able, under this provision, to go to Strasbourg to meet a group of Members of the European Parliament to discuss lawnmower noise but one will not be able to go to the Council of Europe to talk to its delegates about the matters for which they are responsible. The Council of Europe is included in the arrangements in the Commons.
	Perhaps even more important at this stage of European history is the fact that the Western European Union is the only European forum that is concerned with security and defence. Members of the House of Commons can go to Paris, the planning cell in Brussels and so on to visit the WEU, which at this stage may well be particularly relevant. I therefore hope that further consideration can be given to the matter so that Members of this House can enjoy similar arrangements to those that are available to Members of another place.

Lord Geddes: My Lords, I wonder whether the noble and learned Lord can help me on two counts, the first of which directly relates to this resolution and the second of which is very closely related to it.
	First, paragraph (d) concerns getting prior approval from the Clerk of the Parliaments. I give a hypothetical case. What would happen if a Member of your Lordships' House was told on a Saturday when he was at home that it was urgent for him to go to Strasbourg, let us say, first thing on Monday morning? How would he be able to get such prior approval, even though it was for an entirely bona fide visit?
	I turn to my second question, which, I repeat, I know is slightly wide of the mark; however, it is a very old chestnut. By coincidence, I had the privilege of leading a delegation from European Sub-Committee A yesterday to Brussels. We left on the 6.50 a.m. train and returned at about 7 p.m., to which no one objected. We had a fascinating trip. I realise that expenses and the allowance in your Lordships' House are for expenditure incurred. I also realise that no such expenditure is incurred on such trips by individual Members because the expenditure is covered within the budget of the European Committees.
	Will the noble and learned Lord yet again put to the SSRB the proposal that there should be some way of providing financial recompense to Members of your Lordships' House who go on such visits? We were on business of your Lordships' House for 12 hours, which is, dare I say, perhaps longer than noble Lords might have been in this Chamber or in committees. There should be some form of financial recompense. I understand that it would not involve an allowance for expenditure but we were working for 12 hours on behalf of your Lordships. The SSRB might like to consider the matter again.

Lord Cope of Berkeley: My Lords, I join in the gratitude expressed by the noble Lord, Lord Roper, for the generality of the announcement and sympathise with the points made by the noble Lord, Lord Hardy, and my noble friend.

Lord Pearson of Rannoch: My Lords, will the noble and learned Lord the Leader of the House confirm that under paragraph (d), when we disclose the,
	"persons or organisations to be met",
	that information will stay within the confines of this Parliament and will never be divulged to the corrupt octopus in Brussels?

Lord Williams of Mostyn: My Lords, I am always grateful for the non-tendentious way in which the noble Lord introduces his questions. In fact, the only reason that I was determined to see if we could have the travel allowance for going to Europe was to please the noble Lord, Lord Pearson of Rannoch.
	We have obligations in respect of public money, and we also have obligations under the Freedom of Information Act. It appears to me to be a commonplace that if public money is to be expended by any of us or on our behalf, it must be a matter of public record and given appropriate safeguards.
	The resolution is in exactly the same terms as the resolution in the Commons. I remind my noble friend Lord Hardy that I said that the allowance would be broadly in line with a similar allowance. I take the points about the Council of Europe and the Western European Union, and I am always willing to take such matters further with the SSRB. I must say that I was in correspondence with it for several months. It broke with its normal timetable to consider the request and it has acceded to it generally in the form in which it was put. If any noble Lords have supplementary matters for me to consider, I shall establish whether the SSRB will meet them or perhaps be able to advise noble Lords about other sources of funds that may be available for certain parliamentary duties.
	The noble Lord, Lord Geddes, asked a question about Saturday evening. I was about to volunteer the home telephone number of the Clerk of the Parliaments. The advice that I have received is that that is the sort of legitimate detail that we shall consider in the next meeting of the House Committee.
	The question of recompense is more difficult. Noble Lords well know that every allowance that we receive—I add in parenthesis that they are really quite reasonable now—is not subject to the beady investigative eye of the Inland Revenue. We should be cautious about getting into the territory of recompense for 12 hours' labour—unless, of course, we take a much more radical and lateral approach, and have a wholly elected House that is fully remunerated.

On Question, Motion agreed to.

Pensions

Lord Fowler: rose to call attention to the Green Paper on saving for retirement (Cm. 5677) and to the promotion of adequate pension provision in the United Kingdom; and to move for Papers.
	My Lords, the Motion calls attention to the Government's Green Paper—which, incidentally, has not previously been debated in this House—and asks whether the Government's present policies will have the desired effect of promoting adequate pension provisions. In my view, few issues in domestic politics are as important as this.
	I should perhaps start by declaring an important interest. A month ago, I passed the not-altogether-magic state retirement age of 65. I know that that is difficult to believe. Dare I say that this is one of the few places in which one can make such a confession and still be regarded as a young whipper-snapper.
	I must admit that reaching 65 this year does have its advantages. A kindly local authority gives you free Underground travel to avoid the congestion charge and, best of all, you stop paying national insurance, thus avoiding the Government's entirely unjustified increase in national insurance in April. It also enables you to road-test a central policy of the Green Paper; namely, the Government's intention to encourage people to go on working after the age of 65. It has taken me a long time to attune to new Labour but in this respect our aims are exactly the same. I am one of the people whom the Government want to encourage. Sadly, I must report that, as in so many other areas, the Government are strong on aspiration but weak on delivery. What I found was that the Post Office was entirely impeccable in issuing my freedom pass, that the Inland Revenue was super-efficient in issuing a national insurance exemption certificate but that the Pension Service—as a former Secretary of State, it gives me no great pleasure to say this—achieved a standard which, in road-test terms, could best be described as "1960s Skoda".
	In September, my wife and I sought pension forecasts. According to page 42 of the Green Paper, such forecasts are crucial to understanding one's financial position. By the New Year, no reply had been received. I therefore rang the Pension Service myself to be told, of course, that there was no trace of the letter and, what was more, that it was now too late for me to get a forecast. The only way in which I could get the information was to apply for the pension, but I said that that was the point: I wanted to decide whether to apply for a pension. I asked whether there was a leaflet setting out the position on deferment. No, came the reply, there used to be a leaflet but there was not one any more.
	Suffice it to say, finally, following phone call after phone call, I received my pension forecast, although I might point out that my wife, who has now sought information by letter, phone and Internet, has still received no reply. Fortunately, she has some years to go before retirement—and it looks as though she will need them all before she receives a reply from the department. But, I say in all seriousness, if this was the private sector, Ministers would be quick to condemn such a service.
	As to whether or not to defer your pension, the position is anything but clear. Basically, the pension increases by 7.5 per cent per annum for each year deferred but obviously you lose the payments in-between. My actuarial friends say that you need to live into your eighties in order to make it a good investment.
	I dwell on my own experience for a minute or so in order to make a fundamental point. Pension complexity should be at a minimum in any sensible policy. If you do not achieve that, then the public will not understand the system, and those managing and administering pensions will often themselves be defeated. The Government go along with that aim, at least in one respect—the title on the cover of the Green Paper is Simplicity, security and choice. I do not wish to be unfair. I welcome their proposals to simplify the tax regime and, yes, to reward people for working longer.
	However, the question remains whether the Green Paper provides an answer to today's pensions crisis. My answer to that is that it does not—and, above all, my feeling is that Ministers have missed an opportunity to take pensions policy forward. That is not just my view. It is the view, among others, of the National Association of Pension Funds, the Association of British Insurers and Age Concern. Those are bodies that any government might listen to, but all too often the response of this Government is a version of Jim Callaghan's famous response: "Crisis: what crisis?"
	The pensions crisis that I see is this: the working population is saving too little to ensure good lives in retirement; final salary schemes in the private sector are closing—and today we have news of moves to prevent the scheme members that remain from transferring their assets; and we are heading rapidly towards a position of two nations in retirement—the private sector facing problem after problem, and the public sector with unchanged schemes which the Government finance or stand behind. In that context, frankly, it is breathtaking that MPs should choose this moment to improve the terms of an already generous parliamentary scheme.
	Of course no one claims that everything that has gone wrong in pensions can be blamed on the Government. I do not remotely want to claim that. They cannot be blamed for the new FRS17 accounting rules, or the worldwide collapse of share prices. But they can be blamed—they should be blamed—in a number of other crucial respects. They should be blamed for their £5 billion a year pensions tax. That was a policy introduced in 1997 on the basis that stock markets were rising and was actually termed a "reform" by the Prime Minister. That reform has so far cost pension funds—or, to be more accurate, all those saving for retirement—over £25 billion. It has inflicted damage on millions of pension savers throughout the country. The Government should not underestimate the public anger that there is on this policy.

Baroness Hollis of Heigham: My Lords, perhaps the noble Lord will allow me to intervene. I would not normally do so and certainly not during an opening speech. Is he now saying, contrary to Mr Willetts, that on behalf of his Benches he would now reinstate ACT?

Lord Fowler: My Lords, I shall address that specific point. I am not speaking, as the noble Baroness says, on behalf of my party, but as a Back Bencher. If I was speaking as a Front Bencher, I would be doing so from those Benches. If the noble Baroness does not understand that distinction, then I think that, with due respect, she might study the position a little more clearly. But I shall seek to set out my position on that.
	I believe also that the Government should be blamed for short-changing funds on contracted-out rebates. It sounds a technical issue—which is why the Treasury love to make its savings in pensions, and that has always been the case—but what it means is that in 2002 pension funds received £1.5 billion less than was their due.
	Above all, the Government should be blamed for their complacency, which—dare I say?—has just been exhibited. They have defended their inactivity on the basis that far more was being saved in non-state pensions than was the case. Thanks to some outstanding work by David Willetts—my party's very excellent spokesman on pensions—whom the noble Baroness has just mentioned, we now know that when the Government claimed that in 2001 £86 billion was put into non-state pensions the true figure was actually £43.7 billion—about half. That was a mistake that was made.
	In short, I do not believe that around the country and in politics generally, there is any serious disagreement that in the pensions area things have gone very wrong. But politics—and I accept the challenge—is not just about criticism, it is also about suggesting answers. I suggest that the question now is whether from the ashes we can find some broad agreement on the way forward. I believe we urgently need a new consensus on pensions. Pensions policy is not just for a Parliament, it is for the next 40 or 50 years and preferably longer.
	The search for such a consensus is not now some forlorn hope, as perhaps it was back in the 1970s when I first started taking part in pensions debates. What strikes me today is the amount of agreement there is on the way forward—not of course in every detail, but in broad approach. The Institute for Public Policy Research—not exactly a Conservative front organisation—and the National Association of Pension Funds reach very similar conclusions. I dare say that I and my Liberal Democrat neighbour in the Isle of Wight, the noble Lord, Lord Oakeshott, would find much that we could agree upon. The big question—and the question the Minister needs to answer—is whether the Government will join in seeking such consensus.
	So what should the aims of pensions policy be? The first aim should be to provide an adequate pension for everyone in retirement. That is patently not achieved by the basic pension today. There is no argument about that; otherwise we would not have pension credit. Next we should aim to have a genuine partnership between state and private provision. Here there has been a radical shift by the party opposite, which I very much welcome, with Ministers aiming for 60 per cent private provision and 40 per cent state. I hope that the Minister will confirm in her speech that that remains the Government's aim. Our third aim must be to have a system which the public understand. Only if people understand what the state will provide and what it will not can we talk sensibly about individual saving.
	No one can claim that the present state system meets the requirement of simplicity. I always remember from my own pensions review in 1985 that about half the people covered by the state earnings related pension scheme did not know and did not realise that they were so covered. Ironically it is this Government who abolished SERPS but of course they have added the state second pension and pension credit.
	As far as the pension credit is concerned, I supported that introduction. But my view has always been that this should be a benefit for those who, through no fault of their own, did not have the opportunity to build up a pension. I do not believe it should be a permanent feature of the system for the rest of the century, as it would act as a disincentive when opportunities to build up a pension are provided.
	It is here that we have the big question for future policy. It seems to me that a consensus is now forming on the basis that there should be one state pension, which is certainly more generous than at present and probably with a higher rate for older pensioners. To achieve that you would fold in at least the resources now going to the pension credit and the second pension.
	You would then have a better pension but also a clear distinction between what the state provides through the taxpayer and what the individual should do in saving for his own retirement. It was this kind of solution that I sought to achieve in the mid-1980s. To those who say that this is a revolution, let me say that today it is being put forward by the pension funds and the actuaries, neither of which figure in the Che Guevara list of well-known revolutionaries.
	Side by side with that policy, it is essential that governments should do everything in their power to encourage savings above the state level. That means, as the Green Paper says, better advice and adequate checks. But it also means the Government taking positive steps to promote saving. That could mean matching contributions from the Exchequer to encourage savings, especially for moderate earners. It should certainly mean removing absurd disincentives to save, such as the current rule that forces everyone with a personal pension to take an annuity at the age of 75. The Government underestimate public feeling on that issue.
	As to cost, I need few lectures from the Minister on cost, having spent six years in charge of the biggest budget in government—I still bear the scars of battles with successive Chief Secretaries, most of whom still seem to inhabit the Benches here and some of whom, I notice, still keep an eye on me from the Back Benches. The Government are not on strong ground when they talk about cost when they are removing £5 billion a year in taxes—and also now spending on state provision less as a percentage of gross domestic product than almost any other European country.
	The Government have unnecessarily boxed themselves in on cost. Pension age should also be brought into the equation. If the choice is between lower pensions and a slightly higher retirement age, I know how I would vote. The Government may want to encourage working after 65, but they have set their face against any increase in the state retirement age. If the United States can, over a period, move to 67, I see no reason why we cannot do at least the same during the next 20 or 30 years.
	I emphasise again for the Minister's benefit that I speak for myself on the proposals. After a quarter of a century of speaking for my party—well, at least for some of my party—I value my independence. But I perhaps speak for more than myself when I say that there is a widespread feeling outside the House that the Green Paper is a lost opportunity. That feeling is shared by organisations in no way inherently hostile to the Government.
	The public can see clearly enough the crisis in pensions. They are prepared for radical solutions. No one would claim that that is what the Green Paper offers, but the pensions debate should move on and seek wider goals than the Government has so far set out. I beg to move for Papers.

Lord Haskel: My Lords, I congratulate the noble Lord, Lord Fowler, on moving the Motion and welcome him to the over-65s club. He spoke much about what the Government have done; I shall consider the private sector and see what are the feelings of people who work in business and industry about pensions.
	The bull market of the 1980s and 1990s was a good time for pension funds and for company executives, because the rapid rise of share prices meant that companies could reduce and sometimes even eliminate their contributions to pension funds. The extra cash could be used for investment or increased dividends. So, as the market rose, pension fund surpluses increased and so did company cash flow and profits.
	That encouraged fund managers to increase their exposure to equities, so that most had portfolios of about 80 per cent equities and 20 per cent bonds, even though their liabilities were for payments for pensions—a more bond-like liability. Amazingly, many actuaries concurred. They assumed that the equity market would continue to rise and so, ignoring the risk, they valued equities higher than bonds, even though a pension fund has bond-like commitments.
	In three short years, the situation has been reversed. The fall in equities has been so great that if, during the past 16 years, interest and dividends had been reinvested, pension funds would be better off owning government bonds than equities. JP Morgan's UK government bond index has returned 448 per cent since the start of 1987, compared with a total return of 387 per cent from the FTSE all-share index. That seems to cast doubt on the calculations of most actuaries and the abilities of most pension fund managers and trustees. They failed to adapt to an era of low inflation. There must also be a case for examining whether the relationship between company executives, trustees, pension fund managers and actuaries had become too cosy, and whether conflicts of interest were forgotten.
	In January, I was in the United States of America, and attended a meeting addressed by Mr Jack Grubman, who was the Wall Street analyst who was fined many millions of dollars for promoting the shares of his bank's clients rather than shares on their own merits. At this meeting, someone asked him how he handled the conflict of interest of being an analyst and also working for a bank. His response was:
	"What used to be called a conflict of interest is now called synergy".
	Here in Britain, we have yet to see the full effects of that synergy.
	On 20th February, the noble Lord, Lord Oakeshott, told us that the pension fund deficit of the FTSE 100 companies was £77 billion—the equivalent of 93 per cent of last year's profits. Monday's Financial Times told us that pension funds lost £100 billion last year. The extra costs associated with withdrawal of the advance corporation tax privileges—about which the noble Lord, Lord Fowler, spoke—pale into insignificance against that.
	The Chancellor withdrew the privileges on tax on dividends but not on interest, bonds or other paper, such as loan stock or convertibles. As it has turned out, the encouragement to hold on to bonds, not shares, was exactly the right message.
	Business must respond and we must find a way forward. I agree with the noble Lord, Lord Fowler: some schemes will have to examine their retirement ages and may have to raise them. Pension entitlements may be linked to average salaries, instead of final salary, which is usually at the peak of someone's career. Some companies are reducing their pension liabilities by closing their defined benefit plans to new employees. Others are switching to defined contribution schemes. But those are savings for the future. There is still the cost of tackling growing deficits by changing from equities to bond-like securities. Of course, that will affect investment in industry.
	Employees may be prepared to pay more into their pension schemes. Current problems may encourage them to do so—provided that they can have confidence in their pension fund managers. I hope that companies will consider the effect on staff relations of changing the rules—especially those companies that took pension contribution holidays during the 1990s. Trust and morale take years to build up but can be destroyed in days.
	Managers also need to convince savers of the need for hedge funds and complex derivatives. The role of those activities in our pension funds needs to be explained, explored and understood far better by regulators and pension fund managers, to convince us as savers that it is not just a sophisticated form of gambling with our money, and that nor are there any time bombs in five, 10 or 15 years when many such contracts run out.
	I hope that, whatever is decided, the Minister can assure us that it will be facilitated by simplification of the tax regime that the Government have promised. It is nonsense to hold the Government responsible for the effect of all that on company profits. It is the result of mismanagement and misjudgment, which occurs in every sector of business. Managers must try to learn the lesson and move on.

Baroness Barker: My Lords, I declare an interest as an employee of Age Concern England. As is often the case in this House, we are indebted to the noble Lord, Lord Fowler, for providing an opportunity to consider a matter of fundamental, immediate and long-term importance. It seems to be his special knack.
	The context of the debate is an unprecedented degree of uncertainty about the future of pension provision. It could be argued that none of the factors commonly agreed to be the causes of the current pension crisis is new. Increased longevity, falling stock markets, a decline in employer contribution and failure by individuals to make adequate provision for their old age are all factors that have been seen before. However, the combination of all of them at once, coupled with the closure of defined benefit schemes, has led to widespread alarm.
	Pensions have always been a settlement between the Government, employers and individuals on how best to manage the risk of incapacity and poverty in old age. At present, it seems that that settlement is being ripped up on all sides. Companies and governments seek to pass risk to individuals, with strong exhortations to save more at a time when investments are falling. Many who thought to remedy pension deficits by investment in property might be about to find out soon that what they believed to be a prudent course of action is just as insecure. Uniquely, the Government have the power to create the necessary climate in which to manage those risks in the long term.
	The proposal to simplify the taxation regime has been universally welcomed. We on these Benches endorse it also. However, the reaction to the Green Paper has been mixed, as the noble Lord, Lord Fowler, said. When the CBI breathes a sigh of relief that the issue of compulsion on employers has been ducked and Help the Aged castigates the failure to address the level of the basic state pension, it is a fair bet that the Green Paper aims for lots of targets and misses most of them.
	Our colleague in another place Steve Webb and we have advocated some of the proposals in the Green Paper for some time. We welcome the proposal to scrap rules that prevent people drawing down pensions while remaining in employment. The greater stringency concerning the winding-up of occupational schemes is also to be welcomed. However, the suggestion that there should be insurance to protect pension schemes should companies go into liquidation is likely to be so costly as to be unworkable.
	Setting a new retirement age of 65 for new public sector workers from 2006 is a proposal characteristic of the Green Paper. Such legal protection for older workers is to be applauded. However, without similar provisions for the private sector or action to address both the unemployment and under-employment of people in the 10 years pre-retirement, it is unclear whether flexible retirement will become a reality or whether it will be an option for only the well-off.
	One of the most interesting commentaries on the Green Paper was made by Will Hutton in the Observer on 16th February. He set out the demographic position, stating that the number of pensioners in Britain was set to grow over the next 40 years to 16 million, with many having a longer life expectancy than that of pensioners today. He then made a point that the noble Baroness, Lady Hollis, repeated in her statement on uprating last night. At present, the Government provide 5 per cent of the GDP for pensions, while occupational and private pensions supply a further 3 per cent. Even if the pension age increases, just to stand still the claim on GDP will have to rise by a further 4 per cent. In the Green Paper, the Government make the assumption that their contribution will remain at 5 per cent and that all further growth will come from private and company pensions. We already have inadequate state pensions. At a time when private investment is risky, the future looks bleak for many pensioners.
	No doubt, the Minister will respond in her characteristically challenging and informative way about targeting and will talk again about the Government's approach to means testing, pension credit and the state second pension. I take to heart the changes in the nature of means testing. But study after study has shown that older people, particularly those with lower entitlement, do not claim means-tested benefits. The investment in the Pension Service may change that, but not if the experience of the noble Lord, Lord Fowler, is much to go by. The DWP's expenditure estimates for 2002 include an expectation that 1 million people will fail to claim pension credit. The complexity of the pension credit and the inadequacy of the state second pension are no solution to pensioner poverty. That is why we would scrap the state second pension, thereby removing the cost and complexity of contracting out, in favour of an increased basic state pension.
	In the short time available, I wish to concentrate on just one element of the Green Paper: the position of women. The noble Baroness put the situation succinctly in our debate on 17th December, stating that,
	"most women work fewer hours for lower pay and for fewer years than most men. So they acquire less national insurance rights and have less occupational pension coverage. But that reduced pension income . . . has to last them for longer. Therefore at each stage of the way we have to intervene to ensure women's greater financial prosperity in old age".—[Official Report, 17/12/02; col. 584.]
	Chapter 7 of the Green Paper is long in description and very short in proposals, particularly on state pensions. It glosses over in one paragraph an issue that, above all, has shaken women's faith in the state pension system: the married women's stamp. The noble Baroness will know that my colleague in another place receives hundreds of letters from women who paid the married women's stamp and now receive derisory pensions of a few pence a week. At a time when we need to promote faith not just in private pension provision but in state pensions, the 1.5 million women still working who have paid the married women's stamp should be written to in plain English and advised of their pension provision. That would allow them, while they are still working, to make advance NIC contributions that may enable them to retire with some dignity.
	A group of people not mentioned specifically in the Green Paper are black and minority ethnic elders. Now and for the foreseeable future, they lose out in the pension lottery. The present generation of black and minority ethnic elders suffer because of the time of their migration to this country, broken contribution records and sometimes language issues. At its most stark, the position is as follows: if you are a Bangladeshi woman pensioner, statistically you are likely to be one of the poorest people in this country. Will the Minister tell us whether, at this key point, when we are considering overall pensions policy, work has been carried out in the Social Exclusion Unit and her department to find out whether that pattern will be repeated in future generations? If so, will her department take the position of future generations on board in any proposed pensions Bill?
	It is time for the Government, employers and individuals to develop the new consensus about which the noble Lord, Lord Fowler, talked. Some immediate issues need to be dealt with to begin to build the necessary trust for that work. The Green Paper contains some interesting proposals but it is still incomplete.

Lord Alexander of Weedon: My Lords, I, too, thank my noble friend Lord Fowler for drawing attention to the crisis in the pensions industry with such clarity and power. There are signs of the crisis every day. Yesterday, Rolls-Royce announced that its pension fund deficit was almost five times the amount of its annual profits. Today we read that the pensions watchdog OPRA is apparently approving emergency rules that somewhat unmusically prevent employees from transferring their own pensions to another pension fund.
	I thought that it was policy to encourage portability of pension funds. I invite the Minister to deal with that point in her reply. The speed with which our perceptions on the soundness of the pensions industry have changed is remarkable. Five years ago, when I worked in the City, we congratulated ourselves on the fact that the industry in this country was well funded. Most leading companies, apparently well advised, took contribution holidays for several years running. Now that the position has changed so dramatically, it is not so clear how many of those companies have the will to increase their contribution substantially. Shareholders can hardly complain if they do. They took the benefit of the holiday in the good times, and they should not only recognise that but encourage companies to do all that they can to fund their promises. On that point, I agree with the noble Lord, Lord Haskel.
	I am not optimistic that shareholders will do so. In my 10 years in the City, I found that there was a sublime disinterest on the part of institutional shareholders in anything to do with the welfare of employees. Their predominant interest in employees was whether the company could cut its labour force. The private industry will need great encouragement and, indeed, prodding to do what it should in that area.
	I shall not go into the causes; they have been rehearsed. I agree with those who think that the initial £5 billion raid on pension funds in 1997 was unwise, even in the climate that existed then. I feel passionately that it would be iniqitous and obstinate of the Government to continue it. That would reveal that the Government were not prepared to play their part in grasping the problem and acknowledging the errors of the past.
	Basically, as has already been said, final salary schemes are unfunded promises. They are particularly vulnerable to bankruptcy. The concept of a final salary scheme has virtually died for new employees, but the money purchase or defined contribution scheme offered instead is thoroughly unsatisfactory. Anyone who has saved for 10 years under such a scheme has had a negative return on their investment, except for the tax relief. They are understandably disillusioned and averse to further investment.
	People work side-by-side, with the fortunate ones having a final salary scheme that may well be honoured and the unlucky ones having an inadequate money purchase scheme. That does not make for the best relationship between company and staff. One organisation that I chair is finding that about half of those offered the money purchase schemes refuse them. Those people are mainly the lower paid and more vulnerable workers, those who will be most disadvantaged on retirement. In that organisation, we must wrestle with a problem for which we have a clear responsibility. Fortunately, we can fund the deficit substantially, but there is no easy solution for the future.
	It has never been easy to interest people in pensions for the future. The young have more immediate needs; the reward of investment is long deferred; and the topic is complex. When we add to that the fact that the returns look questionable, there will be even less interest. The Government have not necessarily been speedy to recognise that there is a crisis. However, if they regard the issue of retirement as fundamental to society, they will be speedy to act. I hope that, to seek best practice and involvement, they will set up a wide-ranging review to try to establish the facts, bottom out the extent of the black hole, predict the future and engage employers, unions, actuaries, pension providers and consumer representatives in a radical and urgently needed re-think of a problem that will not go away. They should do that regardless of whether it achieves a consensus, for the situation warrants it.
	I hope that the Minister will not regard my speech as a party-political contribution. The issue of retirement transcends party politics. It engages with an enormous range of socio-economic and moral issues. It engages us all. That is the spirit in which we should approach it.
	I feel that, for some reason, the clock has gone slowly while I spoke. Although I am well within time, I am grateful for the opportunity to make a contribution. I look forward keenly to hearing the Minister's reply.

Baroness Greengross: My Lords, I hesitate to speak in the debate along with so many illustrious experts. I congratulate the noble Lord, Lord Fowler, who is one of the most experienced experts in the field, on securing the debate. It is timely for the House to debate the issues now, and the Green Paper was extremely important. I know that it has been much criticised for not grasping some nettles, but there is much good in it, and credit must be given where it is due.
	The current pensions crisis is not caused just by falling stock markets; there are also the implications of rising longevity and declining birth-rates and the ensuing changes in the dependency ratio, an issue that I am always raising in the House. We must ensure that all departments are alive to the broad, worldwide and societal implications of ageing and longevity. We should be as aware of that as we are of the global implications of climate change, but that is not always the case. I remain to be convinced that the Government have taken that on board as they should.
	I turn to what I think is good in the Green Paper: a simpler pensions framework and tax regime—it is time that we had that; clearer and better information about pensions and savings; and simpler products, as Sandler recommended. People do not understand pensions and savings, but they need to. There is agreement that we need a more proactive pensions regulator. That is vital, if we are to ensure that there is confidence in occupational schemes. The Green Paper also refers to the regulation of equity release, putting all types of scheme on the same footing. That is important, if the underdeveloped market is to develop as it might.
	The Green Paper also speaks of the need to make retirement more flexible and give more encouragement to older workers. That is essential, but we need more detail on how it will work in practice. It has taken a long time for it to get here and for the Inland Revenue to consult on ways of enabling workers to draw part of their pension, while working for the same employer. That issue was highlighted by the Employers Forum on Age, which I was privileged to establish in the mid-1990s, so I am pleased that that is being done. Paying enhanced state pensions to people who defer retirement to 70 is very sensible.
	The case for a rise in the state pension age has not yet been made, and I agree with the Government on that. However, if longevity continues to increase as it did in the last part of the past century, we will have to reconsider the issue, especially if more and more people aged 60 and over work longer, as we hope that they will.
	There is the issue of compulsion on individuals and employers. The establishment of the Pensions Commission, chaired by Adair Turner, is welcome, as long as that is not a way of deferring a decision for too long. Sooner, rather than later, the commission or the Government will recommend that there should be some kind of compulsion on those who can afford to make provision for their retirement, particularly, perhaps, the self-employed or certain employers.
	There are things missing from the Green Paper, however. We have not learnt what the long-term future of the basic state pension is to be and how it will interact with the pension credit, welcome though that is for rewarding saving and increasing the income of the poorest pensioners. We need to consider especially the issue of the take-up of pension credit, a point raised by Age Concern.
	The Government's estimates assume that two thirds of people will take up the credit. We need some kind of assessment of what a minimum income in retirement ought to be. Again, I refer to the Age Concern modest but adequate model which is an excellent way of looking at this issue. It would have been better if the Government had found a way of ensuring that employers continued to contribute to employees' pensions schemes. What matters most is the level of contribution, not the type of scheme.
	Defined contribution schemes can be more flexible and more appropriate for today's mobile work-force. However, the ABI says that the average employer voluntary contribution to defined benefit schemes is more than double that to defined contribution schemes—11 per cent as opposed to 5 per cent. Just 9 per cent of relevant employers are contributing to stakeholder pensions. Why is that? That was not dealt with in the Green Paper.
	Equity release schemes do not just need regulating, they need developing. Little in the Green Paper looks at how equity release schemes might be an option to increase retirement income for the two-thirds of people who own their own home. For example, for specific uses they could be ring-fenced for care home fees, for home improvements, and so forth. Illogical benefit rules on the treatment of capital, which is not included if it is tied up in housing equity but included if it is turned into income, do not help.
	The Green Paper proposes little on reforms to the current tax relief regime. I am attracted to the ABI's idea of additional pension tax credit. Does the Government need to provide more incentives? It cannot be right that most current tax relief goes to the wealthiest—namely, taxpayers paying 40 per cent. That seems illogical.
	The Minister will not approve of one of my final points. I am sad that half of British pensioners who live abroad are unable to receive any uprating to their pensions—depending on the country in which they now live—even if they spent their whole working career in this country before retiring. It is illogical that a winter fuel payment is paid to people living in French Guadeloupe, but there is no compromise for people moving in retirement to live with family in another country—for example, in Zimbabwe.
	As the noble Baroness, Lady Barker, said, there could have been more in the Green Paper about the position of women, who are most at risk of poverty in retirement. I am disappointed at the lack of specific proposals to tackle this and I am shocked by the ABI statistics that in 2000 men retired with, on average, two-and-a-half times the income of women.
	To conclude, it is important to remember that the pensions crisis did not begin when the stock market crashed in 2000 or even when the Labour Government was first elected. In my time at Age Concern, it was there all along, lying hidden. Now we all know what the issues are—pensioner poverty, the savings gap, rising longevity, and so forth. The Green Paper tackles some of those issues and deserves credit for doing so. However, at the same time, it ducks other issues which I think we shall have to face before too long.

Lord MacGregor of Pulham Market: My Lords, it is a great pleasure to follow the noble Baroness, Lady Greengross, whose knowledge of these matters is immense. I declare an interest as a non-executive director of Friends Provident. Until recently, I was chairman of the House of Commons Pension Fund. I am still the trustee of another pension fund and, of course, I am now a pensioner—a year earlier than my noble friend Lord Fowler. I must tell my noble friend that I have had a freedom pass for a year. On three occasions already it has failed to work. That is because the strip becomes demagnetised. Apparently, it does not happen often, so someone kindly suggested that it was because of the magnetic personality of the owner.
	As the noble Lord, Lord Alexander, said, six to seven years ago we were proud that our pension provision was way ahead of most other members of the European Union. Tragically, we can no longer say that. The gap has considerably narrowed. The whole private sector, on which the Government rely, is in turmoil.
	Noble Lords have mentioned some reasons for the turmoil. Clearly, they are not reasons for which the Government are to blame—namely, the demographic position; the issue of longevity and early retirement; the dramatic decline in the stock markets during the past three years; FRS 17 which, although not wholly responsible, has added to the tremendous switch—the trickle of a few years ago has now become a flood—from defined benefit schemes to defined contribution schemes; and, of course, the black hole that we are constantly reading about in many company pension funds—again, partly due to FRS 17.
	I agree with my noble friend Lord Fowler, and others, that one of the major causes of the situation is the removal by the Government of tax relief on pension funds at a cumulative £5 billion per year. There is also the point made by my noble friend concerning the position on contracted-out rebates. There is a neat symmetry in the savings gap which the ABI has identified as £27 billion and the over £27 billion cash flow already taken away from pension funds by these government measures. I know that there are different elements involved, but there is a neat symmetry in that £27 billion has been lost and at least £27 billion extra is required.
	The Government's solutions are simply not working. I suspected that the stakeholder pension would not meet its target of employees earning less than £20,000 identified by the Government. It is clear that the target is not being met. I understand that 90 per cent of companies which offered stakeholder pensions to employees had a nil response.
	Therefore, stakeholder pensions are failing. But that may not be surprising. One of the biggest mis-selling scandals of all time would have occurred if the Government had encouraged people earning less than £15,000 per year to take up stakeholder pensions. Because of the minimum income guarantee and even allowing for the pension tax credit, that is clearly the position.
	Recently, Mr Richie, of Scottish Equitable, made the point well when he said:
	"For the majority of low earners, the combination of pension credit and lack of scope to pay for persuasion and advice within the 1% charge cap looks toxic".
	Therefore, a large number of the people identified in the Green Paper—namely, the 3 million people seriously under-saving and the 10 million people not saving enough—are simply not going to be tackled within the private sector.
	I understand that the Minister recently said in public that the Government are shifting their position on the 60:40 target of 60 per cent provision by the private sector and 40 per cent by the public sector—as opposed to the previous 40:60 ratio. Will the Minister indicate whether that is the case? If so, it acknowledges that the private sector is unable to provide for a substantial part of those who are under-saving. That is an important point.
	With all that background, the Green Paper simply does not match up. The gap between the problems, which are clearly set out, and the solutions is huge. I believe that various inter-departmental working groups have put forward schemes, but the dead hand of the Treasury has come down solidly on many of them. One can see that a whole series of proposals have been made. Clearly, some parts of government have wanted to go a good deal further to produce a solution to the problem. The Treasury has allowed a quarter solution. But it does not measure up.
	The Green Paper has a number of good measures, many announced earlier, including flexibility and raising age thresholds, although I agree with my noble friend that we must be more robust on age thresholds. There is a lot of tinkering, some good points on education, but endless reviews that fail to deal with the substantive point. Andrew Smith said in a Statement on 11th July in another place that one of the two acid tests for the Green Paper must be what would increase the level of savings for retirement. On that acid test, the Green Paper totally fails.
	In this context, I turn to defined contribution and defined benefit schemes. There is much to be said for the shift to defined contribution schemes, although obviously, for those who have them, defined benefit schemes are better. They fit life styles better and give an element of security to the owner of the pension if a company goes into liquidation. The problem is that in the switch from defined benefit to defined contributions employers are not contributing enough. That is the real issue, and it is the issue which the Green Paper does not address. Therefore, as regards the problem of encouraging people to save for the long term rather than for immediate gratification, further incentives are needed, especially for employers. I agree with the noble Baroness, Lady Barker, that the ABI proposal for a pension contribution tax credit is one way. For a cost of £1 billion—much less than the £5 billion lost as a result of the Chancellor's earlier measure—£3 billion-worth of additional savings would be produced.
	The Inland Revenue document on simplification of the tax system goes much further and is more robust than the Green Paper in producing solutions. The principles in the document are right and provide a good platform on which to work. I hope that they will be taken forward. However, some details require further adjustment. Unfortunately, I do not have time to deal with them.
	Pensions must be sold. They are not bought, like most savings schemes. The private sector must be encouraged to go out and sell them. Frankly, I have always worried that the 1 per cent pricing cap will be insufficient to cover the costs of many companies which sell them. Equally, the Government must contribute to the cultural climate. I quote from a recent Daily Telegraph leader:
	"Government, regulators and industry need to create a more positive environment for the investing public".
	One of the problems of the past five years is that there has been cost and blame on many people who have been good providers and tried to provide properly. Therefore, a culture has been created in which the whole industry is believed to be faulty. It is most important that the Government create a different environment.
	I wanted to make many other comments, but my time is up. The critical issue is that on the acid test of whether the Green Paper will increase the level of savings for retirement it fails. The Government will have to think again.

Lord Lea of Crondall: My Lords, I congratulate the Government on publishing the Green Paper and the noble Lord, Lord Fowler, on introducing the debate. I agree with him that we want to find a consensus which will last 20 years, not two. In that goal, there is an analogy with the 10-year plan for transport, which people now say should be extended to 20 years. It is highly desirable, because transport investment must be passed by each Parliament and it is not possible for infrastructure to be conceived in two years. We all know that motorways such as the M25 take 20-plus years to build.
	Why do I emphasise that analogy? I do so because we must be careful. There was an all-party consensus on transport in both Houses, but the policy was in danger of being derailed by what happened at Hatfield. We must therefore distinguish between the short-term and long-term trends which face us and the Green Paper is good at doing that.
	We know that the proposals will cause outrage somewhere or other. I refer to demographics in other factors—not so much to the Stock Exchange as to the longer term trends. Whatever we do about taxation will cause outrage with one group or another; for example, as regards retirement age and compulsion. Intergenerational equity also arises. One has only to watch Rory Bremner's programme to gain a good social insight into all of that and many other key questions.
	Like the noble Lord, Lord Fowler, I want to begin with incentives. The biggest of all the long-term strategic changes, accelerated by the fall in the stock market, has been the underlying problem of the economic ratio between lifetime earnings in exchange for work and a proportion of those lifetime earnings in exchange for non-work. We all understand earnings for work, but we are talking about earnings for non-work.
	In crude terms—it is not too far out of the ball park—we are looking at a ratio in our lifetime of 2:1; that is, twice the number of years in work as in non-work. Within the foreseeable future, we could rapidly be moving towards a ratio not a million miles away from 1:1. You do not need to be Einstein to realise that if the ratio were 1:1, you would have to pay "tax" at the rate of 50 per cent—forget defence for the moment—merely to pay for the same amount of time when you are not working. Clearly, that is unworkable and we must address the problem. I echo what was said by the noble Lord, Lord Alexander of Weedon, about getting everyone around the table in order to achieve a common analysis and a solution to the problems. Otherwise, we shall have only distrust and mutual recrimination.
	The noble Lord, Lord Fowler, described what he and his wife experienced in trying to postpone their state pension. It is interesting, but how is the ordinary punter supposed to know about the capitalised value of a state pension? In the late 1970s, I was a member of a Royal Commission on the distribution of income and wealth. I know a little about economics, but I was astonished by the capitalised value of the state pension. It totally transformed the position of the so-called distribution of wealth. How are people supposed to make such decisions and how are they supposed to know whatever figure will not sell them short? There must be trust in the Government, trust in the employers and trust in so-called independent advisers—but I am afraid to say that I increasingly do not trust them because of the kickbacks. A great deal of academic literature is published about the trust society and the trust economy, and most important in all this is the issue of trust.
	I want to make a point about working longer. When Beveridge introduced his scheme, it was normal to make explicit the distinction between the two classes of society. The manual workers would die within three years of retirement. Beveridge's proposals were therefore economic because many would be dead by the age of 68. Today, we can expect to live for 15 years after retirement at the age of 65, which changes the picture. However, given that we cannot take it with us, a difference will remain between people whose life expectancy is at the lower end of the scale and people whose life expectancy is at the higher end. How are people supposed to know when means testing will kick in for them and whether in the present jigsaw puzzle it will be in their interests? Should they say, "Forget it, I'll take whatever is on offer in the state system"?
	I turn to the other end of the income scale and to a point on which I do not see eye to eye with the noble Lord, Lord MacGregor, in so far as I followed his drift. The noble Lord believed that the document on taxation produced before Christmas was important. That much I agree with—it was a well-written document. I believe that a pricing cap of 1.4 per cent is good. In a debate two or three months ago, I suggested that we did things the other way around; that is, scrapped the tax incentive and gave everyone the same tax expenditure. Currently, 50 per cent of the tax expenditures go to the top 5 per cent of the people, which is an unsustainable position.
	It is more difficult to combine the ratio of final salary schemes with part-time work. If we are moving towards not having a cut-off retirement age but a gradual retirement age, we shall have to consider that issue.
	As the noble Lord, Lord Alexander, said, we must avoid people thinking that their social contracts with their employers have been torn up. I want to build on the suggestions in the Green Paper in regard to institutions that we can trust. The Consumers' Association and the National Association of Citizens Advice Bureaux could do more to establish independent bodies that people can trust. Independent financial advice must be independent, without the kickbacks that have destroyed people's confidence. Many people are saying, "We may as well club together and buy a racehorse". That is not a good position from which to go forward. The pension commission has a good agenda to look at over the next three years, and I very much welcome that.

Lord Blackwell: My Lords, I, too, welcome the opportunity provided by my noble friend Lord Fowler to debate this issue of substantive public policy. Before contributing some ideas, I shall follow the noble Lord, Lord Lea, in revisiting earlier sections of the Green Paper which refer to the scale of the challenge. We need to get it in context. However, the Green Paper does not lay out the nature of the challenge as clearly and as starkly as we need to see it.
	There is a tendency for any generation to view the world around it as normality and to project that normality forward as the natural state of the world. We have a tendency to do that in regard to pensions and savings, and we do so at our peril. The truth is that we—if I may use my noble friends and myself as an example of a single generation—are part of a golden generation that has a unique opportunity in the history of mankind.
	Two things have come together over our lifetimes. First, as has been mentioned, there has been an extension in life expectancy. For the first time, people expect to have a comfortable life after the age of 65. At the beginning of the century very few people lived for very long beyond retirement age.
	Retirement has become affordable for many of us because of the second thing that has happened in our lifetime—the massive expansion in the working population, partly because of population growth and partly because of increased participation. That growth in the workforce has led to economic growth and to rising incomes from which people can afford to save. It has also driven rises in financial assets and housing values. This has led to the belief that it is affordable for many of us to have a pension expectancy in retirement which will lead to a comfortable lifestyle. It is a unique perspective in history. But it is one which, I suspect, will not be easily repeated by the generations that follow. We need to understand that fact and face up to it. There are a number of reasons. Most importantly, the growth in the population and the growth in the workforce that we have experienced will not continue. In fact, the working population is set to decline. That, as the noble Lord, Lord Lea, pointed out, will change the dependency ratio. Whereas there are now three people in the workforce for every person in retirement, by 2050, as the Green Paper points out, there will be half that number—that is, 1.5 workers for every person in retirement. That means a greater share of GDP will be going to non-workers.
	The other consequence of lower growth in the workforce is a lower growth rate in GDP. A report published recently by the European Union estimates that declining population growth rates across the EU mean that GNP growth rates will average about 1 per cent over the next 50 years as opposed to 2 per cent to 2.5 per cent historically. In some countries, Germany and Italy, there may be a zero or negative growth rate in GDP.
	Fortunately, the UK will do slightly better—the Government's Green Paper suggests somewhere between 1 per cent to 2 per cent—but it will still be significantly lower than past growth rates. Less rapidly rising incomes, less income available to save and less rapidly rising asset prices, both shares and property, will impose a double burden on the working population. Not only will they have to support more old people but they will have less income and less rapidly growing assets from which to save significant amounts for their own retirement. There will be a dramatic change, which we have to recognise in order to consider policies that will be up to the scale of the challenge.
	What can we do about it? The answer clearly is not more public funding. That would merely reflect the problem. The current unfunded deficit for government state pensions has been estimated at more than £1,000 billion today, which puts the £100 million unfunded liability of private pension schemes into context. That assumes only inflation adjustments, which is completely unrealistic to give people a reasonable standard of living after another 50 years. If one were to keep state pensions in line with GDP, one would double the funding costs over the next 50 years on a smaller working population.
	So we cannot rely only on the state sector. As the Green Paper concludes, we must have more savings, and we need a radical shift in the savings rate in order to achieve that. Like other noble Lords, I welcome the extra flexibility that is promised for pension systems, but that does not go far enough.
	I suggest, first, that all parties should consider again the possibility of a much wider tax-exempt savings vehicle, where one can put in savings which, after a period of two or three years, are exempt thereafter from tax as long as one holds them. These savings could be used not only in retirement but before retirement in emergencies or in situations where people need to call on their funds. The scheme should be much more flexible, much simpler, much easier than the current narrowly defined pension schemes. In particular, as other noble Lords have said, they should be exempt from the annuity rules.
	Secondly, I suggest that we should recognise the substantial amount of wealth that has been accumulated outside of financial assets in property and in housing. I endorse the suggestion of the noble Baroness, Lady Greengross, that we should do more work on enabling people to realise such wealth through properly structured and supported equity release schemes. We should also recognise its importance by abolishing inheritance tax and allowing this important source of wealth and savings to be handed down from one generation to the next. This will give more people the opportunity to get a foot on the ladder. As we know, property ownership is now widespread in the population.
	Thirdly, the Government should consider matching contributions to their savings schemes, particularly for the lower paid, a point referred to by my noble friend Lord Fowler. We know that it is extremely difficult for those on low incomes to afford a sufficient amount of savings to make a substantive difference to their retirement, particularly with schemes such as the minimum income guarantee around and the complexities that add to the costs of products they have to sell. If the Government were to commit one pound to every pound put aside by individuals and their employers, they could end up potentially with a multiple of four—one pound from the individual, one pound from the employer and two pounds from the Government. This would mean that the small savings of an individual would add up to a substantial amount and would change the savings culture where it needs to be changed.
	Fourthly, I repeat a proposal I have made before. The Government should now face up to crystallising the reality of the liabilities they have for state pension schemes—the £1,000 billion. It is a real liability. I propose that the Government crystallise it and make it specific to individuals so that they can see, without going through the time delay referred to by my noble friend Lord Fowler, how much they have in their own pension pot. This could be backed by government bonds. The knowledge that they have such an amount accumulating would encourage people to top it up rather than believing they were starting from scratch.
	Finally, despite all the possible ways of encouraging savings, we need to face up to extending the retirement age. It is unrealistic for people to expect that, given the demographic and economic facts I set out earlier, they can accumulate enough over their working life to pay for the kind of retirement period we now have, particularly when people are retiring earlier. We should recognise that and allow people to work longer, extending the state working age, if only to encourage people to save more to fund the period until they have the state pension.

Lord Freeman: My Lords, I, too, congratulate my noble friend Lord Fowler on an excellent speech and on winning this debate. I declare an interest as the chairman of a large industrial pension scheme—a final salary scheme. I shall concentrate my brief remarks on the private sector, the role and responsibilities of the employer and of those in employment, as opposed to self-employment, where the problems are more acute. As my noble friend Lord Fowler rightly suggested, the solutions for those in self-employment probably lie in a much more generous second state pension funded by contributions.
	The noble Lord, Lord Haskel, is a distinguished, enjoyable and interesting debater. One always listens to him with great interest, but your Lordships cannot allow the noble Lord to get away with the statement that this problem, described so accurately by my noble friend Lord Fowler, is all due to the mismanagement of companies and trustees. I hope the noble Lord, Lord Haskel, is not including me among those who are responsible for these problems, which are due to many causes. My noble friends Lord Alexander and Lord MacGregor cited a number of reasons for our predicament. I am not slinging any mud, and neither, I think, have many of those who have contributed to the debate.
	What is happening among employers? Some very large companies, including Rolls-Royce, have been mentioned. What is happening out there in industry? Companies with final salary schemes are, by and large, moving towards closing them to new entrants and offering defined contribution schemes instead. That will not reduce the cost to employers of continuing final salary schemes for many years to come. Some may have to reduce certain pension benefits in the future—not accrued benefits—and many are asking employees to increase their contributions. But I stress that employers' costs will rise. In common with many other companies, my own fund, which offers a final salary scheme, has had to make changes. The estimate of the actuaries, Mercers, is that employers' costs will rise by up to 30 per cent over the next five years, for a variety of reasons. In some of its press releases, the TUC seems unfairly to have implied—and I am not blaming the noble Lord, Lord Lea—that employers were trying to save money. That is just not the case.
	I shall put three very brief questions to the Minister. If she is able to answer even one in her reply, I should be very grateful. Before doing so, I should like to put some flesh on the bones of what my noble friend Lord Fowler described as the problem in terms of the present rate of savings. The Green Paper, incidentally, indicates that probably about 50 per cent of all those in the workforce are not saving enough. PricewaterhouseCoopers, a firm for which I work, has estimated that the average total pension—state and private—is set to fall in Britain by 25 per cent by 2050. That means that if one is to maintain very roughly the one-third pension in relation to past earnings, employees and employers must put up their contribution rate by 50 per cent. That is a significant sum.
	My three points are in response to the Green Paper, which invited responses. I agree with what my noble friend Lord Alexander said in calling for a wide-ranging review. It is trailed in the Green Paper by the employer working group. The Minister will obviously tell us more about how that is being set up. But actuaries, consultants, employers and trade unions all need to think hard about how we are to increase the contribution rate.
	The noble Lord, Lord Oakeshott, has yet to speak, but I think his party has trailed the first point that I want to make in the press over the past two months. All employees, in both the public and private sector, should have an annual statement from their employer of their total pension entitlement—state pension, employer pension scheme, additional voluntary contributions—earned to date and prospectively earned at the date of retirement. I share the concern of the National Association of Pension Funds that this will be very costly to introduce, given that the Government want a million employees covered by this annualised pension benefits statement but, by gosh, when it is produced, it will shake up a lot of employees and a lot of employers. I suggest that the state should pay half the administrative cost of such a procedure by way of tax credit or tax relief.
	Secondly, my noble friend Lord MacGregor and the noble Baroness, Lady Greengross, both referred to the suggestion of the Association of British Insurers of a pension contribution tax credit. The principle, with which I agree, is to skew our tax system, which currently provides blanket corporation tax and income tax relief for pension contributions from employers and employees respectively, and introduce an incentive similar to the American 401K scheme, which I belonged to when I was employed in America. An employer's pension scheme must qualify for certain thresholds relating to the level of employer contribution, the number of people covered in the workforce, the treatment of low-paid workers and the treatment of women. If employers reach those thresholds, the state will contribute additional tax relief. My noble friend Lord MacGregor indicated the estimates—they are only estimates—of the likely benefit, and I very much agree with him.
	My third and final point, touched on obliquely by the noble Lord, Lord Haskel, concerns the need to improve the quality of experience and training of employee trustees, many of whom are trade union representatives or are drawn from the working or retired workforce. I think that that should apply to the investment advisers as well. I agree with Paul Myners and Derek Higgs, who both recently produced reports, that independent trustees should be appointed, perhaps the independent non-executive directors of the parent company. Such people would not have a vested interest from the standpoint of employees or employers and could offer a fresh light on a very complicated subject. If any of your Lordships were to sit as a trustee, I wonder how many would understand the complicated legislation.
	I look forward to the pensions Bill which will undoubtedly come in the next Session. I am sure we all await it with great anticipation.

Lord Elder: My Lords, in participating in this debate, I should begin by reminding the House that I am a member of the Economic Affairs Committee of your Lordship's House which is embarking on a major inquiry into the economics of an ageing population. I have little doubt that there will be a repeat of the experience we had in our recent inquiry into globalisation—an equally vast subject—and that we shall be inundated with evidence. I do not in any way wish to prejudge that inquiry, but the Green Paper is one of the key initial pieces of evidence. I welcome both the Green Paper and this debate on it. I, too, congratulate the noble Lord, Lord Fowler, on initiating the debate.
	The starting point for any discussion of pensions has to be the mixture of changing demographics and changing expectations, which mean that more people are living longer, with the belief that they should be able to spend the longer period of their life in retirement in better comfort than ever before. Life expectancy has risen and is continuing to rise. The remorseless arithmetic of improvements in medicine, diet and lifestyle—at least for the well-off nations of the world—means that life expectancy at 65 has risen by 16 years for men and 19 years for women.
	There appears to be no end to that process, which is of course to be greatly welcomed. I suspect that it may be set to rise at an even faster rate than that allowed for by the official estimates. We always make estimates based rightly on current knowledge. But it would be rash to assume that all the great medical advances have been in the past, and none is for the future; and, as the noble Baroness, Lady Greengross, said, this comes against a backdrop of declining birth rates.
	The Green Paper needs to be seen as part of a process, not in isolation. It was quite right that the Government turned their attention first to the questions of pensioner poverty and the affordability of the state scheme. I know there are many who are keen to do more, but there has been a really significant increase in the income of the poorest pensioners, within the context of a scheme which, in marked contrast to many in the rest of the European Union, is affordable in the medium and long term.
	As we know, the Green Paper talks about four areas: informed choice; saving at the workplace; building trust in the financial services, and extending working life. It is on the first and last of those that I intend to concentrate my brief remarks. Inevitably I come to this debate without the expertise of many of the contributors from whom we have heard. However, I have had the singular misfortune to have had in my career four major periods of employment, each with its own pension scheme, interspersed with a few periods of self-employment, when I have had to make my own pension arrangements. In the first of those periods I was working in the Palace of Westminster, and I was able to benefit from a scheme in which the authorities made a contribution in my name—as it happens, with Equitable Life. If I am unclear as to what I might expect from my periods of employment should I reach an age when I am dependent on those policies, it is largely because I am afraid to ask.
	No one underestimates the importance of pensions, nor the fact that for a whole range of reasons far too many people have failed to face up to the problem, preferring to put off to the indeterminate future decisions that in reality need to have been made when first going into work. But for too long there has not been the framework to help individuals to make sensible decisions, and it has been too easy to ignore the warning signs.
	So, I for one entirely welcome the first set of proposals in the Green Paper, those on informed choice for the individual. The simplification of the tax regime and the improvement in individual information on pensions will give people more of the information they need to make the right choices and, indeed, will put a quite proper onus on them to ensure that adequate provision has been made.
	I also greatly welcome the introduction of a single lifetime tax-free limit on pensions, designed to help saving at the time and in the way best suited to the person's needs. As job patterns become yet more flexible, so too must patterns for saving for retirement.
	The other area on which I should like to comment briefly is that relating to the extension of working life. There are real issues here. Many of the explanations for encouraging people to retire early have little foundation in hard evidence. But the loss of productive capacity by losing too many people who have a full contribution to make to the economy and who wish to do so is more often than not just crude age discrimination.
	The Government's intention to implement legislation covering employment and vocational training in these areas is to be especially welcomed. I also welcome the extension of the New Deal programme to the over-50s. I doubt whether anything can do more to improve the quality of life for people than to find them interesting and fulfilling work. That is every bit as true for the over-50s as for the young.
	I know that there is controversy about the extent to which targeting is now in the system as far as concerns old-age pensions. But the real short-term issue is how we increase the take-up of benefits by those entitled to them. I have no doubt that were the Opposition to change their position from one of confusing pensioners by saying that the scheme is bad and should be abolished to one of encouragement to pensioners to take all that is their due, that would be a real contribution.
	In commenting on the Green Paper it would be wrong not to make reference to the present circumstances as regards pensions—and to what is regularly described as a "pensions crisis". What has happened has been that a fundamental weakness in the system has been exposed all too clearly by the collapse of the stock market. I do not believe—in their fairer moments the Opposition do not believe—that that is down to government policy. David Willetts said as much at the end of last year when he very fairly drew attention to factors such as those we have been discussing: increasing longevity and changes in the labour market.
	Nor would I want to blame fund managers entirely, although my noble friend Lord Haskel made a number of interesting points. I believe that in the new low-inflation environment in which we live, the need to look again at the question of bonds rather than equities should at least be revisited. The argument in favour of equities seems to be that that is what has always been done. I for one was impressed by the case made by the former head of corporate finance at Boots, John Ralfe, explaining its move to bonds. The devotion of the industry to equities at the very least needs to be reassessed. Too often managers have claimed expertise based on a record of delivery which reflects little more than that they were operating in a strong, long-running bull market. The evidence does not seem to support the view that the risks of equity holding have really been properly assessed, as millions now know to their cost.
	Perhaps the most interesting aspect of the Boots' experience is that the change saved Boots 97 per cent of what it had paid in fees, and costs for management reduced from £10 million per year to £300,000. At the very least there is a case to be answered. I think fund managers would do well to try to do so.
	No doubt there will be continuing debate, and much further evidence will be considered, but I wholeheartedly welcome the Green Paper as setting the right framework in which future decisions can be made.

Baroness Byford: My Lords, three years ago a person with a pension fund of, say, £100,000 could expect an annuity of about £9,100 per year. In the intervening time that fund has fallen in value to about £68,900 and the annuity it will purchase has also fallen to only £4,837 per year. That cannot be right. It is not sustainable. Why should people be forced to take up an annuity when they are 75, given the figures that I have mentioned?
	Back in 1997, at a stroke the Government withdrew the advance corporation tax relief to which several noble Lords have today referred. I believe that that one action started the pension crisis rolling. We are not saying that it is all the fault of the Government, but that one action really did start it rolling.
	In raiding pension schemes the Government took billions: £5 billion, to be exact, in the first year and every following year. That affected not only individuals but companies and public authorities. Can the Minister tell the House whether a risk analysis was undertaken before that decision was made?
	I have made a rough calculation—I am very much the amateur among professionals here today—which indicates that even at today's low rates of interest it probably would be better to spend the equivalent of the annuity out of capital and leave some of the funds to one's descendants than to put them into a pension fund.
	I was intrigued to learn that in 2001 actual pension savings totalled £43.7 billion, compared with the Government's expectation of £86.4 billion, again referred to earlier. What a record! Either the Government have greatly underestimated the damage that has been done to the pensions industry, or perhaps the department has simply got its sums wrong.
	I would have hoped to have seen some real incentive in the Green Paper to encourage saving. However, like others I was a little disappointed in that regard. The part by which I was encouraged and about which I want to ask the Minister, is paragraph 24 of the summary, which states:
	"We will introduce a single regime with a lifetime limit on the amount of tax-privileged pension saving".
	Is that an ACT replacement, or what will that be? Again, I should be grateful for some help on that.
	Not only are the Government almost certainly losing out on their private pension piggy bank; the state pension is now so complex it must be costing ever more. Each year the number of pensioner households rises. Following the introduction of pension credits, over 55 per cent of households will be drawn into means testing. Can the Minister tell the House the estimated cost of the state pension and the provisions that have been made for 2003–04 with the addition of the pension credit scheme? Can the Minister assure the House—perhaps I get suspicious in my old age—that those administration costs have nothing to do with the reason why the whole question of the state pension was not included in the Green Paper?
	Many organisations think an opportunity has been missed to simplify the state pension system, which they consider to be too complex and too reliant on means testing. Other noble Lords have asked the Minister to give the Government's target of the retirement savings coming from the private and public sectors. The last time I heard, the answer was 40 per cent public and 60 per cent private, but I gather that there may be a wobble on that as well.
	Like the other noble Baronesses who have spoken, I am seriously concerned about the effects of the pension squeeze on older women in particular. Recent figures from the Equal Opportunities Commission have highlighted the salary gap between men and women in similar jobs. On top of that, women take a break when they have children. Their husband's pension scheme will usually have a survivor rate, for which many are grateful, but I understand that current pressures are resulting in a cessation of final salary schemes for new entrants and a lowering of survivor rates for existing members. I am anxious about that.
	As other noble Lords have said, women are often lower paid. They work fewer years than their male colleagues, but they live longer. I had hoped to see more in the Green Paper that is relevant to them.
	The pension pressures affect public service employers every bit as harshly as they affect individuals and private companies. From next year, the local education authority in my home county of Leicestershire will have to find an extra £6.9 million to cover teacher pensions. That has huge implications. That extra burden is a large portion of the swingeing increases in council tax that we shall see all over the country.
	As other noble Lords have said, there is insufficient pension cover provision in our country at the moment. Some 50 per cent are not saving enough and many do not plan to save at all. I find that particularly worrying among our younger generation. I think they look at some of the results over the past few years and decide that it is not worth saving. The Green Paper should have addressed those concerns. We heard earlier about longevity and people being able to enjoy better health.
	We should also remember another great change that has taken place in the workforce. Those in my generation might originally have expected to work for one or two companies alone, but today's generation will work for many companies. I would have liked more flexibility and encouragement in the Green Paper for pensions to be transferred more easily.
	Finally, I am greatly worried about the rampant indebtedness in this country at the moment—not just nationally, but among individuals, too. How do the Government address that, knowing well that people are spending today rather than saving for tomorrow, when we should be considering saving to cope for the years of retirement that we hope to enjoy?
	I thank my noble friend Lord Fowler for giving us this opportunity to express our concerns and hopes about the Green Paper. I realise that mine is a personal viewpoint. I have fears, but I also have hopes. I hope that the Government will move their rhetoric into action. We have a lot of consultation at the moment, but we need action at the end of the tunnel.

Lord Vinson: My Lords, we are indebted to the noble Lord, Lord Fowler, for the debate. His knowledge on the subject is second to none. I declare an interest as an old age pensioner. I am also proud to be a member of Frank Field's pensions group, which has put forward a number of useful ideas.
	By way of background, I would first like to share some thoughts that should guide our approach to pensions. It is a well accepted principle that an individual can take out an insurance policy to insure himself, but a nation cannot insure itself. The risk has to fall on someone. The same applies to pensions. An individual can have an inter-generational charge through his pension savings on other individuals, but overall the nation pays.
	So there is very little difference in national cost between funded and unfunded schemes at the same level. They all come out of the gross national product in the year paid. Additionally, funded schemes carry the advance costs of capital accumulation and rather higher running costs, but have investment advantages. I also recognise that there is no difference between pension and other sorts of saving other than the tax treatment. A tax privilege given to one person is a tax cost on another. One person's tax break is another person's tax hike. The cost of all pensions comes out of the same rice bowl. If people live longer, they simply have to work longer in the paddyfields. It was well said of Robinson Crusoe that he could not retire because if he did he would have starved to death.
	I welcome the Government's move, albeit at a snail's pace, to encourage later retirement and to reward it with a more generous state pension. It is high time, too. Unlike the noble Lord, Lord Fowler, I did not bother to check the penalties for delaying one's pension from 65 to 70. I was horrified to find, when I started to draw it at that age, that I would have to work another 14 years, until I was 84, until I got back the money that I had forgone. This is hardly a way to encourage people to work longer after 65.
	As time is short, I shall deal specifically with one area. There is a tendency in the pensions world to address problems of entry. Sadly, much less attention is given to the problems of exit. Encouraging people to save is one thing, but how they draw down those savings is equally important. Current annuitisation arrangements do not encourage saving and do not work with the grain of human nature by allowing people to pass on to their heirs some element of their unexhausted savings. I particularly praise the work of Tom Ross and his Pensions Policy Institute. Its suggestions have the ring of common sense and I hope a number of them will be implemented.
	Many people today have little more than the old age pension to retire on. A high percentage of citizens feel that they cannot afford to save. Those who have saved and are currently scraping along on their old age pension and tiny personal savings could find themselves living next door to a spendthrift neighbour who has never saved a penny and is on minimum income guarantee, with all the rental and free dental benefits that flow from it. That neighbour is better off than them, because they have fallen into the savings trap by trying to make some small provision for their old age.
	So why save? To encourage people to do so at the moment is to give them false advice against their own long-term interests. I accept that the Government have recognised this moral hazard and are starting to do something about it by changing pension subsidy from the minimum income guarantee to pension credit, but there is still a nightmare of complexity. So I should like to make a new suggestion, as more needs to be done.
	Implicit in my remarks is that the basic state old age pension should be sufficient for a person to live on with dignity and without the need for means testing. However, as demographic pressures get worse, I am sure it will never be enough. If people, particularly those on below the national average wage, are to be encouraged to save additionally and voluntarily, it must be done in a manner that is simple, safe and understandable, carries no up-front commission, is low cost and, in retirement, genuinely rewards previous thrift.
	My suggestion is that we revitalise the well trusted National Savings movement and introduce a new National Savings pension bond. The idea needs refinement, but basically people could use the bond throughout their working lives to save up to a maximum of £25,000, indexed, which is a huge sum to a great many working people and roughly double what they currently save. Such savings through the National Savings movement could be invested in index-linked bonds or a new fund specifically designed to finance our crumbling infrastructure.
	This country has a tide of savings seeking a safe haven and an infrastructure that is crying out to be rebuilt. In the name of common sense, it must be possible to bring these two together to create a more prosperous economy that will help to pay more generous pensions through a mechanism other than a tortuous PFI.
	I come to the key element of my suggestion. People saving through the bond on retirement would automatically get an annuity at a pre-guaranteed indexed rate, based on their contributions and age at retirement. I estimate that, on a full fund of £25,000, this would give an annuity of roughly £30 to £35 a week at 65. That is about 30 per cent additional to the old age pension. Such a guaranteed annuity would remove the lottery associated with pension exit policies and give the same security that is available to those in the Civil Service and elsewhere.
	In itself, however, such a scheme would not be enough if such savings were penalised and means tested for social security. The annuity paid from the special pension fund should be disregarded for social security purposes. That would do away with the present pension trap and genuinely reward citizens in their old age for the income that they have forgone by saving through their working lives. Such a scheme would be a real incentive to save and would keep some element of ownership in pension provision.
	The National Savings movement is trusted, and computer technology makes life-time savings accumulation easily recorded and cheaply administered. Government could stand behind the annuity payment rate. Invested into infrastructure, it would be doubly worth while. In many respects, it would be a voluntary funded National Insurance scheme, providing a safe haven reward and bringing real security to those on low incomes in retirement.
	Unless we make savings understandable and worth while on exit, there is no answer to the question, "Why save?" The timing is never right to make pension change, but perhaps some of these concepts could be grafted on to an existing scheme to make them more attractive and to help them to achieve what we must all aim to achieve—higher levels of secure savings for people who work longer to enjoy a better old age.

Baroness Turner of Camden: My Lords, I, too, thank the noble Lord, Lord Fowler, for introducing this timely debate on the Green Paper. I note that it is intended that there should be further consultation over a whole range of issues, which is surely to be welcomed, as is the Green Paper itself.
	I still hold the view, which I believe is also held by the NAPF, that the simplest way in which to ensure at least a basic income in retirement is by substantially increasing the basic state pension. I am aware of the Government's objections to this course, as they are restated in the Green Paper. The policy of targeting, which really involves means testing, introduces a whole range of complicated benefits, such as the MIG, the pensions credit, the second state pension and so on. Means-tested benefits are expensive to administer and involve lower take-up. Had the National Insurance Fund been used for the purpose which many people still believe it was intended, there would now be no difficulty about funding increased non-means-tested benefits. Instead, it has been used only partially for that, and has been diverted by successive governments to other purposes.
	We now face problems with occupational pensions. I have always believed that the provision of occupational pensions was one of the success stories of the last century. The introduction of the original pension plan in the mid-1970s by my late and very much missed noble friend Lady Castle, with SERPS and contracting-out arrangements, occasioned a growth in final salary schemes. As a result, a generation of retirees has been able to retire at an acceptable living standard. However, many large firms have recently decided to close their final salary schemes to new entrants and to replace them with defined contribution schemes, to which the employer often pays a great deal less and the employee bears the risk himself. Moreover, there is no certainty about the eventual outcome, which will depend upon the uncertainties of the stock market. Unions are threatening industrial action to protect members' pension rights.
	The Government have sought to deal with the situation in which too few people are saving for retirement or covered by occupational schemes by the introduction of stakeholder pensions. The employer's sole responsibility is to provide access to stakeholder providers—no employer contribution is required. Moreover, the amount that must be paid into such schemes to provide for a pension of a reasonable standard can seem very high to young people at a time when they may have other expenses, such as repayment of student loans, mortgage repayments, cost of childcare and so on.
	The Government are concerned that people are simply not saving enough. I agree that it is a problem, but people are likely to save only if they can be reasonably sure of security. Those who have saved via savings accounts have seen interest rates decline, so that the income that they once expected from their money has diminished. If they have invested in the various types of investment accounts, the value of their original investment may have drastically declined. The times are not propitious for saving.
	So what has to be done? A great deal more could be done to encourage the growth of occupational pensions. Unfortunately, successive governments have not been as supportive as they should have been. Admittedly, there have been some tax incentives, but the previous Conservative administration, anxious to improve the take-up of personal pensions, actually encouraged people in occupational pensions to withdraw from them and take out personal pensions. As we know, that had disastrous results.
	The present Government, through their activities over ACT, actually undertook a raid on pension scheme assets, the results of which we are still seeing. Employers also contributed to the present pensions crisis by awarding themselves contribution holidays at a time when the stock market was producing substantial returns. Now, of course, employees are having to pay the price. A number of us protested at the time, but were assured that actuaries had attested to the security of the pension promises, so employers largely got away with it. They should not continue to do so and should be prepared to pay into schemes to ensure that pension promises are protected.
	There have also been one or two instances in which the insolvency of companies has affected the pension scheme, with the result that unfortunate employees face severally diminished pension expectations, sometimes losing out altogether. Therefore, the issue of the security of pension provision is of considerable importance.
	The Government's Green Paper attempts to address these problems. They are aware that many professionals in the pensions industry have been complaining about over-regulation—with some justification, since pension administration seems to have become very complicated. But the Government rightly point out that it is a question of getting the balance right. Some regulation is absolutely necessary for the protection of pension scheme members.
	Much of the Green Paper is concerned with security, and a new pension regulator is proposed. That seems a good idea, but I would be interested to know about the interaction with those already involved with pension security. We have OPRA, a pensions ombudsman—and, of course, there is OPAS, of which I am a board member, which gives a free service to individuals with relatively minor pension problems. How would the new regulator fit in with existing arrangements?
	As a form of protection for employees with defined benefit schemes that are under-funded when an employer becomes insolvent, a centralised clearinghouse arrangement is suggested. The TUC has suggested the establishment of a pensions protection fund, which could be coupled with insolvency insurance to cover any shortfall in employer contributions at the time of wind-up. These are all propositions worthy of consideration, but actuaries tell me that a fund would be viable only if it were underwritten by the Government.
	The Pickering Report made a number of suggestions clearly designed to save defined benefit schemes, including the suggestion that it should be part of the contract of employment that employees should belong to the company's scheme. I am inclined to support this, but a lot depends on the security of the scheme. The same is true of the suggestion occasionally made that there should be compulsory contributions. Again, employees must be assured that their investment is reasonably safe, otherwise that will not be popular.
	Pickering suggested that survivors' benefits be discontinued and indexation abandoned, with a view to making such schemes more acceptable to employers. I hope that these recommendations are not accepted, as the first would be damaging to many women, who often have not had the opportunity to build up pension entitlement themselves, and the second, since people now live longer, would be disadvantageous to the older pensioner. I do not even like the suggestion that it should apply only to pensions of £30,000 or more. Once the principle is accepted, the figure can be varied. It is not a good idea and should not be pursued.
	Finally, there is a section dealing with the special problems of women. The problem of poverty in old age is largely that of women. This is because many women have an interrupted work pattern. For many, improved state provision is the only answer. The original SERPS attempted to deal with the problem by basing entitlement on the best 20 years' earnings, but that provision was quickly dropped. The problem of interrupted work patterns still remains, and the Green Paper does not really address it. Awareness of pensions issues among women may be low, as the Green Paper said, but that is not why so many women are poor in old age. They simply do not have the money to invest in pension provision, no matter how aware they may become.
	The Green Paper provides a useful basis for further discussion and one hopes that, as a result of the wide consultations envisaged, solutions to the problems envisaged will arise.

Lord Northbrook: My Lords, we are all grateful to the noble Lord, Lord Fowler, for initiating this debate. First, I declare an interest as an investment fund manager. From a City perspective, I can see the effect on pension funds of the raid on their assets which has cost them £5 billion annually. While by no means claiming that to be the only cause of the current pensions crisis, it clearly has not helped. The change in accounting standards with the adoption of FRS 17 is also not the cause, but it very much highlights it. Abolition of the carry-forward provision for the self-employed in relation to retirement annuity premium relief has rubbed salt into the wound.
	The Government's pensions Green Paper, following the Pickering and Sandler reviews, made important general points—not least of which is that up to 3 million workers are "seriously undersaving" for their retirement, and that an independent commission will now investigate whether workers should be forced to make additional private pension arrangements.
	The plan to rationalise the eight different pension tax regimes is welcome. I note the proposed lifetime ceiling of £1.4 million and endorse the views of the noble Lord, Lord Oakeshott, that the Lord Chancellor's pension package of £2 million should be subject to a tax clawback. I agree also with the comments of the pension analyst from the financial advisers Hargreaves Lansdown, who said that the ceiling,
	"should make understanding a pension easier".
	One of the most radical proposals in the Green Paper will, from 2010, allow employees who delay drawing their pension to take a higher compensatory amount, of 10 per cent per year as opposed to the current 7.5 per cent. New public sector workers from 2006 face the prospect of having their retirement age increased from 60 to 65. However, as stated by Ros Altman, governor of the London School of Economics,
	"Whilst the Green Paper has addressed the need to allow employees to work longer, it has done little to encourage them to save more".
	There are no more incentives offered to employers or employees to save through pensions, no objectives for savings, not even the admission of a crisis.
	Separate plans to encourage savings through simpler charging structures do not seem likely to succeed. The take-up of low-cost stakeholder pensions, launched last April in an attempt to encourage poorer-paid workers to save, has been disappointing.
	The Green Paper has also promised long consultation, but little action, for employees whose final salary pension schemes were being closed or wound up. There is, I believe, an argument that the Government should change the rule that treats current employees of firms that are winding up their pension schemes less favourably than those who have already retired.
	The Pensions Policy Institute, commenting on the Green Paper, said that the paper had failed to address the problems of state pensions that shrink as the years go by. It said that the new means-tested benefits go up every year in line with earnings, but the state pension climbs more slowly in line with prices. That means that the state pension will have shrunk so much by the time today's workers retire that most people will have to claim the means-tested part.
	The PPI continues its examination by stating that most of a current pensioner's income comes from the state. Yet Ministers assumed that individuals would do more towards saving for retirement when in reality many people are not doing so. In fact, said the PPI, saving into private pensions has "stalled" with people starting later and saving more irregularly. The Government must, in its view, reform the state pension if they are to avoid tomorrow's pensioners being worse off than this generation's. Shadow Work and Pensions Secretary David Willetts said:
	"The Government has been wrong to exclude reform of state benefits from the many consultations. It is not too late for the Government to change its mind".
	The accountancy firm PricewaterhouseCoopers, in a press release of April 2002, calculates that the incremental cost of the new pensions credit could increase from about 0.2 per cent of GDP, in 2004–05, to more than 1 per cent of GDP by 2050, assuming an indexation of the guaranteed credits. Even with the price indexation of the basic state pension, these calculations suggest that total government spending on state pensions and related benefits will increase by about 1 per cent of GDP over the next 40 to 50 years, equivalent to around £10 billion at 2002 GDP values. Furthermore, about 70 per cent of all pensioners would be likely to be eligible for the means-tested pensioner's credit by 2050. In total, the number eligible could double, from about 5.5 million in 2004, to about 11 million pensioners by 2040 taking into account the ageing of the population.
	PricewaterhouseCoopers believes that there are alternative ways of spending that significant additional amount which would make the state pension system much simpler and reduce significantly the reliance on means testing. I understand that, at present, on the Government's own estimates, only 65 per cent to 75 per cent of eligible pensioners claim the MIG. Two alternative long-term strategies have been suggested by PWC to address those drawbacks of the pension credit. First, the Government could gradually phase out the pension credit after 2010 and recycle the money into a stronger second state pension, raising almost all pensioners above the means-tested income support level by 2050. Or, secondly, the Government could increase the basic state pension to the level of the MIG and index that to earnings, paying for it by avoiding the additional cost of the pension credit by 2010, and gradually increasing the state retirement age from 65 to 67 between 2020 and 2030.
	So, in conclusion, there is a pensions crisis which has not been fully tackled by the Government. To stem it, a savings climate needs to be re-established. Removing the rule of compulsory annuities, although with a minimum protection still in place, would be a great step in changing the climate back again. Rewards could be given by way of tax incentives for those who keep their ISAs for a long time. Tax credits should be restored to pension funds and the reliefs taken from the self-employed reinstated. Reform also needs to be made to the state pension, which will be made much more complex by pension credits. For that reform, one of the PricewaterhouseCoopers measures seems appropriate. I would favour the plan to phase out means-tested benefits in the long term so that the whole system becomes simpler.

Lord Naseby: My Lords, I declare an interest. I am chairman of the Tunbridge Wells Equitable Friendly Society, now trading as the Children's Mutual; a trustee on the employees' pension fund; and a non-executive director of two other companies, both of which have occupational pension schemes.
	My noble friend Lord Fowler distinguished himself in the world of pensions through his work over many years in another place. His contribution today should be noted by all sides of the House and by those outside who read our proceedings. When he said that the Green Paper was a disappointment, he understated the situation. It is a long time since I read such a long Green Paper with such a limp conclusion.
	It is true, as several Members have said, that the Chancellor's £5 billion raid did not create the current problems any more than the stakeholder pension scheme—as disappointed as the Government must be with that—has helped the situation. The day before yesterday, I think, the Financial Times—like the noble Lord, Lord Haskel, who is still in his place—drew attention to the pension holidays enjoyed by some firms whose pension funds were in surplus. It has been suggested that taking a holiday at that time amounted to mismanagement. However, companies exist basically to create wealth—that is, to invest, to produce a product, service and dividends, and to create shareholder value. If an independent actuary—I emphasise the word "independent"—states to pension trustees, of which I am one, that their fund is in surplus, it is correct that we should not necessarily seek from our employer an increase in any one year. If we are sufficiently in surplus, it is perfectly appropriate that those funds should be taken as a holiday because, in a private-sector-oriented society, they would be better spent on investment in the company, on new products, new developments or whatever is needed for that company to succeed—because, unless it does succeed, the pensions will be in trouble. We must remember that we need companies that succeed.
	The situation in the outside world for those of us who are having to deal with it is very serious. So far as I can see, there has been almost no reaction from Her Majesty's Government to date. Almost all defined benefit schemes will soon be closed to new entrants. Almost all new entrants will join defined contribution schemes—rather like the US scheme, but not with quite the same benefits. What is even worse is that young people still have the option of whether or not to join a scheme. I venture to suggest that we should look at what the Australians do. They make it compulsory—and so it should be.
	Mention of young people brings me to the question of what incentive exists for the brightest entrepreneurs in our society if they are to be restricted to a lifetime fund of £1.4 million—made worse by the fact that Members of another place and paid Members of this House, from the Lord Chancellor downwards, are to be exempt.
	In addition, none of us, as trustees, guessed that mortality rates would be adjusted in the way that they have been in recent times. We have to rely on outside recommendations. It is not for individual trustees to work out what the mortality rates will be at any point in time.
	Above all, as other noble Lords have said, there has been a collapse in share prices—and we cannot be confident that there are not more falls to come. Perhaps some funds should have held greater investments in bonds. Yet an examination of the post-war period suggests that those who invested in equities have done broadly better than those who invested in bonds. It is wrong to suggest that funds are not invested in bonds and cash. A great many are.
	Every time a company announces a deficit, the press pounce on the fact—which pushes down the share price and compounds the company's problems.
	The deficits faced by pension schemes have to be understood. Few schemes are in difficulty as regards paying pensions currently or in the foreseeable future—that is, over the next few years. As I have said, all trustees keep some of the funds in cash or in readily available bonds.
	There is less of a problem so long as we remain under MFR, with time to increase any deficit by putting up company contributions and by asking employees to increase their contributions. It seems to me that, given a 10-year extension period, the problem could be dealt with.
	But looming over us all is FRS 17 and the date, 31st December 2005. The accounting rule is tougher; it is a snapshot of a fund at a point in time. It was created when the markets were stable and certainly at a time when the present volatility did not exist.
	So what can and should be done? The Government should re-examine FRS 17, talk to those who proposed it and ask for it to be postponed. It was created in a different era. After all, if the FSA can suggest to the life companies that their solvency ratios can be recalculated and they can still be solvent, the same should be possible for FRS17. The Minister shakes her head. I do not accept that it is impossible.

Baroness Hollis of Heigham: My Lords, I was mouthing—perhaps the noble Lord will forgive me—that we had already done that, and they are resolute.

Lord Naseby: My Lords, if they are resolute, the Minister will have to try and try again. It is too easy to retire at that point. The FSA was resolute about not changing on solvency ratios, but it has now changed. In the mean time, I suggest that the MFR should be confirmed for the next 10 years. Furthermore, just as the Government have capital allowances for defined periods in the industrial world, they should consider introducing pension allowances, with a matching contribution from companies.
	The Government have to understand how important it is to get people to save. It is calculated that in order to receive a reasonable private pension today, the necessary pension contribution is about £200 a month. That is where Sandler and stakeholder pensions, frankly, do not have a role. Sandler is geared towards simple products for people at modest levels of contribution.
	In conclusion, today, OPRA introduced emergency rules aimed at banning employees from leaving a company scheme. It looks very like the market value adjuster—so criticised by Her Majesty's Government—that life companies recently introduced. This country has a proud record on company and private pensions, but it is crumbling fast. The Government need to move swiftly to help, and to help positively. If OPRA sees an emergency, then there truly is one.

Lord Jenkin of Roding: My Lords, I, too, want to express my gratitude to my noble friend Lord Fowler for introducing the debate—and, on a slightly different note, my gratitude to him for persuading me to take part. I have listened to nearly two-and-a-half hours of extremely well-informed debate about what I hope the Minister will acknowledge is a very serious problem. I do not see how she could sit and listen to the very knowledgeable contributions from all parts of the House and still maintain what many have described as government complacency in the present situation.
	In the few minutes I have, I want to mention only two matters. Most of the general points have been made. There seems to be widespread agreement that there is a need to close the annual gap—put at £27 billion a year—between what is needed to finance decent pensions and what is actually being saved. The issue is, therefore, not "whether" but "how".
	My noble friend Lord Naseby made reference to the stakeholder pension, as did my noble friend Lord MacGregor. It is clear that the Government, from the outset, set great store by the introduction of the stakeholder pension. In their 1997 manifesto they used the words:
	"high value for money, flexibility and security".
	A few months later they identified the target population as being around 5 million people with incomes between £9,000 and £20,000 a year. They introduced an element of compulsion on employers: any employer with five or more employees is "designated" as being within the scope of the stakeholder pension.
	I was very surprised, therefore, at the reply of the noble Lord, Lord McIntosh, to my supplementary question on 25th February. He agreed that, as he said, about 335,000 employers were designated—the ABI confirmed to me this morning that that figure is about right: it is in the order of 330,000 to 340,000. However, he gave the figure for stakeholder pensions sold as 1½ million. I could not come back on that point—one does not have a chance to do so at Question Time. But I am now told on good advice that that figure was a considerable exaggeration. The figure that I was given by the ABI this morning is about 1¼ million. Independently, the Library has confirmed with the Treasury the same figure—1¼ million. I hope that the Minister will therefore recognise that her colleague misled the House by a factor of 20 per cent. She should not shake her head in disgust. We rely on Ministers for truthful figures. I am afraid that I was not given a truthful figure because the noble Lord, Lord McIntosh, with typical spin, tried to make the Government's position appear better than it really is. That must stop. We need to be realistic about the matter.
	As regards the current figure of 1¼ million, 40 per cent—I quote the figures in the Green Paper—of their sample fall into the bracket of what the Government aimed at; that is, the wage range of £9,000 to £20,000. So, about half a million people in that bracket have bought stakeholder pensions over the period. The Government originally aimed at a figure 10 times that. I therefore agree with my noble friend Lord Naseby who was absolutely right to say that stakeholder pensions had been a failure.
	But one must go beyond that statement and ask the reason for that state of affairs. One reason, that I mentioned on 20th February, is the cap on costs. If a pensions provider can gain access to employees in the workplace and can see a number of people over a short period, he may be able to keep his costs below the 1 per cent cap. However, it is impossible for him to keep his costs below the 1 per cent cap when dealing with, for example, the self-employed trader or the employee who cannot be seen in the workplace. Is it not ironic that the largest picture on the cover of the Green Paper is that of the archetype, self-employed trader, the market stallholder? One cannot sell a stakeholder pension to a market stallholder and keep one's costs below the 1 per cent cap.
	The Government boast about "driving down charges" of selling stakeholder pensions; but if that process leaves large swathes of the target population outwith the reach of pension providers, it is an utterly self-defeating policy. I hope that the Minister will tell the House that the Government are prepared to discuss with the Association of British Insurers the operation of the 1 per cent cap.
	The second point, which I can deal with more briefly, concerns the need to demystify the jargon of the pensions industry. Many noble Lords, including my noble friend Lord Vinson, referred to the need for informed choice. Here I want to mention the valuable initiative taken by the insurance industry through its "Raising Standards" campaign. Consumer research shows that most of us have put off planning our finances due to confusing documentation, a lack of clarity about financial products and poor service.
	The "Raising Standards" quality mark scheme was set up by the industry in 2000 directly to address those consumer needs. It is mentioned in the Green Paper in passing but I hope that the Minister will today give a warm welcome to the "Raising Standards" scheme. It is being run by the Pensions Protection Investments Accreditation Board. I believe that that body is doing an extremely good job. Over 50 per cent by market share of the lifelong savings industry currently operates the "Raising Standards" scheme. That means that customers receive point of sale literature written in plain language, with charges clearly set out; and that the brand is monitored through an annual customer satisfaction index. Pension providers belonging to that scheme have to reach a very high standard of retention, with low penalty charges and so on. I hope that that positive effort on the part of the insurance industry is welcomed by the Government as it is one way to help to close the savings gap.

Lord Oakeshott of Seagrove Bay: My Lords, I declare an interest as a pension fund investment manager for the past 26 years. I duck to avoid a brickbat from the noble Lord, Lord Haskel, and others who believe that the crisis is the fault of pension fund investment managers.
	I thank the noble Lord, Lord Fowler, for introducing the debate. I agreed very much with his trenchant and perceptive introduction. I also agree with him that the Green Paper is a lost opportunity and also, indeed, that we need more radical solutions.
	The debate has been dominated by speakers from the Conservative Benches. I believe that 10 out of the 16 speakers so far sit on the Conservative Benches. I agree with the analysis of the problem of those who have spoken from those Benches but I do not think that we have heard very much in the way of radical solutions. However, I pay tribute to the noble Baronesses, Lady Greengross and Lady Turner, to the noble Lords, Lord Naseby and Lord Vinson, who made radical suggestions, and in particular to those who are prepared to grasp the nettle of compulsion. We on these Benches believe that that is essential.
	The International Monetary Fund, in its annual report on the UK economy issued this week, put its finger on the pensions dilemma facing this country. With its usual cautious wording it stated:
	"Directors observed that the strength of the United Kingdom's underlying fiscal position depends importantly on containing future public pension obligations, which in turn depends on adequate individual retirement saving".
	I am afraid that if you believe the British are doing that—making adequate individual retirement savings—you will believe anything.
	What the language of the IMF means in plain English is that we in this country have got away with a rotten basic state pension for many years because most employees have been covered by generous and secure occupational pension schemes, certainly throughout the public sector, the former nationalised industries and widely in the private sector, certainly in larger companies.
	But now we can feel the ground moving under our feet on private pensions. As the noble Lord, Lord Alexander, and others pointed out, this week alone we have seen Rolls Royce report a pension fund deficit equal to four times its annual profits. The leading City investment bankers, Credit Suisse, First Boston and Dresdner Kleinwort Wasserstein have estimated the current pension fund deficit of the FTSE 100 companies at between £70 billion and £100 billion. As we have heard, company after company are closing defined benefit schemes to new members, making members pay more for worse benefits and, as the noble Lord, Lord Freeman, pointed out, having to dig deep into their profits to keep schemes solvent.
	As noble Lords pointed out, many of the companies now reporting massive pension fund deficits were only too happy for many years to boost their profits in the fat times by taking contribution holidays just when they could have afforded to pay more into their funds to protect their pension schemes against lean times like the present. In fact one company, Associated British Ports, last week closed its final salary pension scheme to new employees while it is still on a contribution holiday. The occupational pension promise in this country depends on either the company or the pension fund staying solvent. If they both go down at the same time, there really is nowhere at present for pensions and scheme members to go.
	With occupational pension funds under such pressure, protection for members and pensioners when schemes wind up moves right to the top of the agenda. The noble Lord, Lord Fowler, made the welcome suggestion that we should seek consensus where possible. We on these Benches, and my colleagues in another place, welcome the emphasis in the Green Paper on the need for sharing assets fairly when pension schemes are forced to wind up. We are happy to work with the Government to get this much needed reform agreed and enacted in the very near future. Where there is a significant shortfall in a fund on wind-up, we believe that pensioners and scheme members with modest entitlements should be first in the queue. Their priority payments might be limited to a multiple of the basic state pension rather than, as at present, giving all pensioners, however well off, the biggest slice of the cake, leaving only crumbs in some cases for long serving employees about to retire.
	Arrangements of that sort, however, only share the misery more fairly when a scheme winds up. They do not provide any more money for its members in total. We offer to work with the Government to see whether it might be possible to establish some form of national reinsurance or indemnity scheme to rescue pension schemes which become insolvent for reasons other than dishonesty by insolvent employers, which is covered already.
	I am bound to say that such a scheme would be very difficult. It will certainly be a non-runner unless the Treasury is prepared to stand behind any industry-wide scheme as the underwriter of last resort. That could be done on the model of the Pool Re scheme, the mechanism by which owners of commercial buildings are able to obtain cover against terrorist risks which would otherwise be uninsurable. Of course, the problem is moral hazard, as in banking. Well funded and safe pension schemes backed by strong companies will be reluctant to pay a levy to support weaker schemes, particularly if that might encourage some schemes to sail close to the wind and not face up to the need to make payments. With DB schemes under so much pressure already, we need to be very careful before loading any more costs or bureaucracy on to them.
	Many examples have been discussed in the House over the past year, in which the Treasury has been only too happy to toss letters of comfort and guarantees of contingent liabilities around like confetti to support PFI and PPP contracts, such as in the bailing out of British Energy and the case of Network Rail. The Treasury will have to decide whether the plight of British pension funds demands equal commitment.
	On those two issues, we would be happy to work with the Government. However, they must go back to the drawing board on their proposals for a lifetime limit on pension savings by better-off employees. I refer to the £1.4 million cap. The Treasury document issued with the Green Paper gave a grossly misleading picture of how many people may be affected by such a cap. It states that only 5,000 people now have personal pension schemes worth more than £1.4 million. So what? The £1.4 million limit, with a 60 per cent effective tax rate for those who exceed it, will bite just as hard on members of final salary pension schemes, whose pension rights will be given a capital value when they retire.
	The Treasury document states that 90,000 people earn more than £200,000 a year. I shall take the topical example of the noble and learned Lord the Lord Chancellor, who earns £180,000 a year and is entitled to a pension of £90,000. I have been officially told in an Answer that the capital value of his pension rights is officially, "at least £2 million". A typical final salary scheme pays a pension of at least half the final salary, so most of those 90,000 people would be caught by the £1.4 million cap. I estimate that, typically, members of a final salary scheme retiring on annual salaries down to no more than £120,000, and in some cases down to £100,000, would be caught by the cap if it were in force.
	That is a much wider swathe of British management and the professions than one would presume from the government documents. I would be delighted if the Minister cared to analyse my estimates further and write to me stating how many people the Government believe would be caught. Quite a bit more of upper-middle England will be caught than noble Lords might believe.
	The other problem with the lifetime cap is that it discourages pension saving by anyone who may be caught by it. The limit should be at the front end of saving for a pension, not the back. The Government's present proposals will force savers to take a massive gamble with their pensions. All professional advice is that one should start saving early, but if people do that in a relatively well-paid job 20 or 30 years before they plan to retire, how can they know whether their pension rights will grow to £1 million, £2 million or even more in real terms by the time they retire? Stock market returns fluctuate greatly.
	The principle of restrictions on high earners contributing to their pension funds is fine. We do not oppose that. However, to be fair and transparent, a lifetime limit of £1.4 million or any other level must be calculated not on an unpredictable capital value of pension rights on a single day many years away but on the cumulative total value of contributions that have built up an individual's pension rights over the years, including employer's contributions.
	Many speakers today, starting with the noble Lord, Lord Fowler, referred to a pensions crisis, as I did myself in a debate last May. I do not think that there is any point pursuing that question further except to ask the Minister gently, if this is not a pensions crisis, what one would feel like.
	The future for pensions in this country is sombre. We have a poor basic state pension, right at the bottom of the European league, topped up by a mishmash of means-tested benefits. Above that, a tried and tested structure of high quality occupational pension schemes almost without parallel in the world is cracking before our eyes. We on these Benches will work with the Government to stop the rot, but the hour is late and the problems grave.

Lord Higgins: My Lords, I agree with all noble Lords who congratulated my noble friend Lord Fowler on introducing the debate, which is on a matter of the very greatest importance. It is deplorable that we have not been given a government debate—a full day's debate in government time—either in this House or, as I understand it, in another place. Perhaps it is not surprising that we have not had one, because there is an almost universal view that the Green Paper is inadequate to deal with the situation that we face. There is a crisis in pensions provision and savings. It is very important that the Government recognise that that is so. I hope that the Minister will make it clear that the Government recognise it.
	We have had a most distinguished debate, with contributions from no fewer than four former Cabinet Ministers and from experts in every part of the House. There have been a number of important and constructive suggestions from my noble friends Lord Vinson and Lord Naseby, the noble Baroness, Lady Turner of Camden, and others to which I hope that the Government will give careful consideration.
	The original Green Paper in 1998 said that it was expected that the proportion of pensions provision would change from 40 per cent private and 60 per cent public to 60 per cent private and 40 per cent public. When I raised that matter last night, the Minister said that it was now an aspiration. It is a strange aspiration, given that almost everything that the Government have done has put pressure in the opposite direction.
	Having said that, one cannot complain about a lack of legislation. Since I entered the House, we have had endless Bills on pensions and social security. The first of those was concerned with stakeholder pension provisions. Opinion on stakeholder pensions varies from "disappointment" to "dismal failure". My noble friend Lord Jenkin pointed out that the take-up has been much smaller than the Government thought. They thought that 5 million people might take them up; in fact, the figure is a little more than 1 million. As has been pointed out in a number of representations that I have received, the crucial matter is that 90 per cent of company-designated schemes are apparently empty. The scheme has been designated, but pensions have not been taken up.
	The stakeholder pension was described by the Financial Secretary to the Treasury as a "safe haven" product. That was a strange expression to use. If someone had invested the full amount in a stakeholder pension when the system was introduced, what would its value be now in percentage terms if it had been invested in something entirely sensible, such as a general tracker fund? The stakeholder pension is, of course, subject to all the variations to which any pension of a defined contribution scheme is subject, in relation to the stock market and so on.
	My next point is on the effect of the state second pension. The noble Baroness, Lady Barker, put forward reasons as to why that was not satisfactory, and I am inclined to go along with what she said. We also have the pension credit provisions, which are of immense complexity. In evidence to the PAC inquiry, it was stated that the computer that will be needed to operate that system will be eight times bigger than that used for the self-assessment of income tax. Another trouble with complexity is that we do not get the take-up that we want. I know that the noble Baroness shares my concern about that very serious problem.
	Another problem concerns means-testing, which has a huge effect on the level of savings. If one saves but the proceeds of those savings are means tested, that is a real deterrent. The Pensions Policy Institute suggested a short while ago that in the current situation three-quarters of existing employees will be on means-tested benefits by the time that they retire. I leave unanswered the question of who will pay for that. It is a serious indication of the level of pension that people at that stage may reasonably expect to get.
	The savings ratio under the Government has been virtually halved. I received a very complacent reaction the other day in answer to a question from the Dispatch Box from the noble Lord, Lord McIntosh. The ABI estimates that the savings gap per year is about £27 billion, which is of grave concern.
	Many noble Lords have drawn attention to the ACT raid on pensions funds and to the cost to the industry, which is about £5 billion a year—cumulatively, I suppose that it runs to about £25 billion. I make only two additional points to the very valid points that have already been made about that. First, the change was justified by the Chancellor—and, indeed, by the noble Baroness the Minister—because it would encourage investment. The reality is that it has not had that effect. Companies not having the advantage of the ACT concession are now finding that they must spend money topping up pension schemes rather than investing.
	Secondly, when the Prime Minister was challenged on that matter, he said, "We don't need to worry because of the high level of the stock market". I am not clear whether he is still of that opinion; it seems unlikely. That has had a major effect, which resulted in the move away from final salary schemes and towards defined contribution schemes.
	A number of noble Lords rightly pointed out that there will be a need, in view of the pension holidays that have been taken, for employers to contribute more. One very much hopes that they will do that rather than change their scheme from defined benefit to defined contribution or close the scheme altogether.
	The fundamental problem that we face with savings is that there is a crisis of confidence about whether one will get an adequate return from savings. The latest figures, published a few days ago, suggested that there was probably no positive return over a considerable number of years, other than the fact that one had had tax relief; without tax relief, one would certainly have a negative return.
	The situation is epitomised by the problem of Equitable Life, which has had much publicity. The noble Lord, Lord Elder, said that he was affected and was afraid to ask what his benefits were now worth. The Government have not faced up to the problems that have arisen with Equitable Life; I refer to the failure of the regulator to protect policyholders' interests. They set up the Penrose inquiry, which is wholly unsatisfactory. The main culprit in all of that is probably the Treasury as regulator. The inquiry was set up by the Treasury on terms of reference that were defined by the Treasury and the Treasury will decide how much of the inquiry to publish. At the same time, the ombudsman put his investigation on hold. Will the Minister assure us that the terms of reference of the Penrose inquiry will not prevent Lord Penrose, if he finds that the regulator or a succession of regulators has failed, recommending that compensation should be paid? That will be very important if we are to restore confidence in that side of the industry.
	This debate is being held under considerable time constraints. The previous Green Paper of 1998 stated:
	"Over time, the share of national income devoted to pensions will increase, but a higher proportion will come from private, funded pensions. State spending will increase but income from private pensions will increase even more as stakeholder pension schemes become established and occupational pension schemes are strengthened and supported".
	The Government have not strengthened and supported such schemes. The chairman of the Association of Consulting Actuaries only the other day said that occupational pension scheme membership and provision is declining sharply. The Green Paper stated that, over the past 20 years, newly retired pensioners have had a higher income than their predecessors. Unless something very radical is done by the Government, that will not be true in future.

Baroness Hollis of Heigham: My Lords, we have had an extraordinarily well-informed and interesting debate, for which I, like others, am grateful to the noble Lord, Lord Fowler. I apologise that we did not have it a month ago but, as the noble Lord, Lord Higgins, knows, I was having eye surgery at the time and could not have done it.
	It is undeniable, as many noble Lords have said, that people are failing to save enough to fund their retirement. I do not disagree with the figures that have been quoted: around 3 million are currently not saving enough and a further 5 million to 10 million may not be saving as much as they would wish.
	The analysis is shared by all of us, so I shall not spend much time on it. Fewer years in the labour market are being asked to support longer years out of the labour market. We enter work later because of more extended education, we leave work earlier and we live longer. As my noble friend Lord Elder said, the figure is a year or two for every decade.
	Moreover—this issue has been underplayed in this debate—there has been a trend to retire early, which, incidentally, has been a trend across Europe. By state pension age, around two-thirds of men and half of women—almost 3 million people—have left the labour market. The key point—noble Lords will be aware of the statistics—is that if one wants a modest occupational pension of £100 per week, one needs to save £30 per week if one retires at 65 but one needs to save £85 per week if one retires at 55. That involves 10 years less to pay in and 10 years more to live off it. That means that one virtually has to treble one's contribution.
	The Government's priority, despite the comments of the noble Lords, Lord Fowler and Lord Blackwell, who quoted parts of the Green Paper, is to encourage more people to work to 65 rather than compulsorily—as opposed to voluntarily—requiring them to work after 65; for example, until the age of 67. That is not to say that that is a closed issue; however, in view of the statistics that I have provided, that is where our priority currently lies. Too often, people have a twilight of dependency on benefits between when they leave the labour market and when they draw their retirement state pension, which means that they go into it already having depleted their savings and without having a pension build-up. That is a major problem.
	The question behind tonight's debate is: why are people not saving more, and what can we do about it? One suggestion that has been offered in the discussion group meetings and consultation exercises in which I have been engaged—this point is often made by financial consumer groups—involves financial realism; that is, people cannot afford the expense. Low earners in particular—those earning less than £11,000 or £12,000 a year—cannot be expected to save into a funded scheme. It is reasonable to expect those people to rely on basic state provision and an unfunded support system. However, of those who are not contributing, one-quarter are younger than 24 and/or earning less than £10,000 a year. The problem is that if one does not start early, one does not build up.
	Equally, there is a real problem for those with very low incomes of going for compulsion. That problem was raised by the noble Baroness, Lady Barker, and her colleague the noble Lord, Lord Oakeshott. Behind that, as the noble Baroness, Lady Byford, rightly said, there is the problem of the fear of debt in this country.
	Women, in particular, put their part-time earnings into household expenditure hoping, too often wrongly—a matter to which I shall return—that their husbands' pensions will be theirs. So the first explanation is that they cannot afford it, and the second is—and this is a more comforting explanation—that they do not understand all that information, and that if only we gave them more all would be well.
	There is a great deal of truth in that. The point about Sandler was not to seek to regulate the salesmen and saleswomen but to regulate the simplified product. That way we might be able to rebuild confidence, together with pension credit, which was like a wrap-around to allow one to enjoy more. That is true. We certainly need simplicity of products and information about them.
	There are others who, although understanding the situation well enough, face conflicting demands, such as student debt, mortgages, university costs for children and possibly even care for the elderly. So they put off making pensions provision or thinking about it until their late forties or fifties. We are therefore almost asking people to be counter-intuitive; to start their pensions early and delay some of their other expenditure as late as possible in order to benefit from compounding. That of course is counter-intuitive to natural priorities.
	That is reinforced by another dimension, which has been highlighted by our research, our focus-group work and from our meetings with organisations. Many people believe that it is an issue that they can put off. They are not perhaps sufficiently worried and do not have enough sense of what your Lordships have referred to today as a "pensions crisis".
	People recognise that they have not put savings away in a pensions format. They see high employment—and we have the highest employment since 1977. That is before taking into account the extra that comes into households of second earners, which has increased dramatically since the 1970s. So there is a real sense of security through earning at the moment, added to low inflation, which as we know makes the value of one's savings last much longer, together with soaring house prices. It is a comfort blanket, in particular regarding people's homes.
	It would be sensible, as one noble Lord mentioned, to improve products that allow safe withdrawal of income from property without trading down. The Financial Services Authority will need to explore that area.
	Putting off pensions provision—and I return to a point raised by the noble Baronesses, Lady Barker and Lady Greengross, with which I rather agree—is essentially a problem for women. Psychologically, they have the mindset that his pension is theirs; that they not only have the comfort of a house but of a husband, or even—and this is a worse illusion—a property and a partner. Yet we know that one marriage in two ends in divorce. Furthermore, 60 per cent of the population think that "common law wives" exist and that they have rights. They are wrong on both counts.
	That suggests that many women will enter old age without even a national insurance pension, let alone an occupational pension. How many women know the difference between the lower earnings level and the primary tax threshold? I guess that there are few. Yet, if only they knew that by working an extra one or two hours in order to get over the LEL, they would build up an independent pension, how much we could help them.
	Much of this may be transitional. To a degree women carry an older mindset that they will look after children or the elderly, while also trying, but not yet succeeding, to build up an independent pension of their own.
	The noble Baroness, Lady Barker, referred to the married women's stamp. Women have made at least three elections to continue with the reduced married women's stamp, as well as being exposed to several publicity campaigns, including one as late as October 2000. I refuse to accept that women are children and cannot take responsibility for documents they signed once when they married, a second time in 1977–79 and again in responding to campaigns in the 1980s.
	The next reason why people may not have developed a pension is because they think it is not financially worthwhile and that the returns are not good enough. Perhaps they do not appreciate the effect both of compounding and—disturbingly—the benefit of employer contributions, let alone the tax wrap-around in which their 5 per cent may produce a 12 per cent or 15 per cent contribution that goes into the pot. They may overestimate the problems and the price of inflexibility—that they cannot get at it. Therefore, they fear not only poor returns but that they are locked into a no stop-loss situation.
	Finally, and this is the biggest obstacle, there is the perception of risk. There has been mis-selling. Have the sharks now become playful dolphins? There is the risk to DB schemes, from Maxwell through to Maersk. There are problems of seeking additional contributions to DB schemes. As regards problems with DC schemes—and I agree with several noble Lords, in particular the noble Baroness, Lady Greengross—providing the money going into the pot is the same as for a DB scheme, over time it can have the advantage of portability without necessarily producing a lower return.
	It will be difficult for people to build up a decent DC scheme when, as with one major food retailer—I am tempted to name and shame—both the employer and the employee put in 2 per cent. That will not produce a decent pension. I pay credit to, for example, insurance companies which put in 12 per cent and 4 per cent from the employee. That can produce a return not dissimilar to a decent DB scheme.
	If those matters have contributed towards people failing to save, what is the appropriate response of government? I was particularly disappointed in your Lordships—as a junior Minister I scold former Secretaries of State, if that is not impertinent—with respect to the language directed at the Government regarding complacency. The suggestion seemed to be that they have a quiver-full of solutions with which to address the problem. I suggest a situation and ask your Lordships to think about it. If the FTSE today stood at 7,000; if therefore half the companies in the country were still taking contribution holidays—indeed a quarter were taking such holidays last year—and if therefore finance directors were not pressing for compensation to go from DB to DC schemes, and more importantly to halve their contributions in the process, and were not exposed to the rigours—and unfortunate ones at this point in time—of FRS17, would we then be talking about a crisis? I ask your Lords to what extent you would hold the Government responsible for what underpins the situation in which we now find ourselves.
	The Government's response is to do as the Chancellor is doing, which is to build for the future and continuing health of the economy in terms of jobs and pensions—because my job is your pension, and your pension investment is my job. The best guarantee of a decent pension in one's 60s is a decent job in one's 20s. Every former Secretary of State in the Chamber today, every Minister and every contributor knows that. The fact that we have the lowest unemployment since 1977 and that there are 1.5 million more jobs in the economy is building up prosperity, even if we have not yet managed the trick of turning that prosperity into pension savings.
	I suggest that the somewhat futile debate about ACT is not germane. I have tried, but cannot work out the hypotheticals of what if it had never happened. However, I shall make three points. It was a tax privilege that encouraged the distribution of dividends rather than their retention. Pensions are already, and continue to be, heavily tax-privileged, which is why I suspect there was so much pressure to scrap the annuity rule at 75 because it is such an attractive proposition. As my noble friend Lord Haskel said, what matters at best value added is management not tax rates.
	The second point is that through the windfall tax we have reclaimed £5 billion. But it was connected at the same time to a cut in corporation tax worth £3.5 billion a year. I calculate that 10 speakers have mentioned ACT, but not one has mentioned the cut in corporation tax. Funny that. If reinstatement was such a good idea, as some noble Lords have suggested—I know that the noble Lord, Lord Fowler, would not commit himself on this point—I point out that Mr Willetts has made it clear that he has no intention of reinventing ACT, unless of course policy changes.
	So what can and should the Government do? First, and I think that noble Lords will agree, they should meet the needs of those who cannot save. I agree entirely with the noble Lord, Lord MacGregor, that what needs to be provided is a floor standard for citizens of a secure basic retirement pension in order to deal with poverty today and to reduce the risk of poverty for future pensioners.
	One popular proposal suggested today is to scrap pension credit, state second pension and to add it to the basic state pension. The noble Lord, Lord Northbrook, wanted to link the entire thing to earnings. At a stroke, as far as I can see, that would add something like £46 billion to public expenditure by 2030. Heaven knows what that would do to the 60:40/40:60 ratio. That is for him and his Front Bench to work out.
	Basically, with such proposals they are asking the basic state pension to carry a lot of weight. That is arguable—my noble friend Lady Turner has honourably argued that for many years—but there are two key points. First, the basic state pension is a national insurance pension. It is contributory. None of your Lordships mentioned—I am sure that you know—that 51 per cent of female pensioners now do not enjoy a full NI pension in their own right, because they do not have a complete NI record, and they are the poorest.
	So any increases in the basic state pension, which go to everyone, go to us, but not to her, because she does not have a basic, complete state pension. If we are not careful, such proposals will redistribute wealth upwards, as opposed to what we are trying to do, which is to target wealth downwards to the poorest. I challenge your Lordships to address the point about a basic state pension funded by national insurance.
	The second point is that that preserves inequalities. We have debated that before, but if we really want to help the poor, and we can either give £1 to everyone or £5 to the poorest fifth, I know where my priorities lie.
	The first role of government is to be a provider and, through the basic state pension but, above all, through the state second pension, which is heavily redistributive, and pension credit, which ensures that value is retained for small savings—and which does not presently exist, because income-related benefits cancel it out—we are meeting that task.
	The second role of government is not just as provider but as enabler, to help extend savings provision, to help to deliver and to construct vehicles to deliver private contracts. How do we incentivise people to save? We must keep people in the labour market longer. I agree with your Lordships' calculations about the 7.5 per cent on the increment past 65, which is why one proposition is to increase it to 10.5 per cent and to advance that. We need to bring more marginal people into the labour market—lone parents and disabled people—and we are succeeding in that. In the Green Paper, we are consulting on whether joining an occupational pension scheme should be a compulsory option available for employers to impose on employees.
	I was also intrigued that no one mentioned vesting. Let me give your Lordships an example. Ms Patel is earning £20,000 a year and putting 5 per cent into an occupational pension—£2,000 after two years. At present, without immediate vesting, the money could be taken out after one year and 364 days. Her £2,000 would be worth £1,200. With immediate vesting, it is worth £3,400. Especially for women, part-timers and those who change jobs when they are young—often quickly—immediate vesting will transform the early size of the pot, therefore compounding the possibilities.
	We are also helping through tax simplification and through stakeholder pensions. I accept the point made by the noble Lord, Lord Jenkin of Rodin, but my statistics state that more than 1.25 million stakeholder pensions have been sold. That is an honourable figure; although we want more. There is a debate about capping; but I disagree with him—what is depressing that figure is not capping but the failure of employers to contribute. Where employers contribute, 85 per cent of employees take up stakeholder pensions; where they do not, only 15 per cent do. That is a more important driver in achieving a spread of stakeholders than is the 1 per cent capping charge.
	If my noble friend Lord McIntosh said 1.5, that may have been a misreading of 1.15, given the latest statistics that he had at the time. If so, I apologise to the House for any slip of the tongue that may have occurred.
	We again had the request about annuities at 75—I think that the noble Baroness, Lady Byford, put the case most eloquently that one should not be forced into that. Leaving aside issues of morbidity drag, about which I suspect that others know more than I do, and the risk—which I do not rate especially highly—of people blowing it all on a cruise, the real question is why people do not want to annuitise at 75. I suggest that that is because the pensions vehicle is so attractive by virtue of its tax privileges that people want to use it for devices and reasons other than merely as a secure income in old age—as an inheritance vehicle for their children.
	If I want to leave money to my children, there are plenty of other ways in which I can do that. I do not have to ask the state to do it by wrapping it with the tax privileges associated with pensions. Leave it through property, building societies, bonds, or whatever one wishes, but do not unreasonably ask for the privileges of high-rate taxpayers to enfold around a pension and then have the right to leave it to one's offspring at the expense of those who have no such tax privileges.
	If the first role of government is as provider and the second is as enabler, I think that we all would agree that the third is as educator, addressing the issue of information. I hope that with our combined pension forecast we shall do exactly what the noble Lord, Lord Freeman, called for. It will come as a cold blast of reality to many people when they read what they might otherwise be getting. That has already started to work: when we have tested that on a pilot basis, people begin—even if only modestly—to put extra money into their pensions. We hope to roll that out on a voluntary basis with other companies over the course of the year. We also want to develop the mass marketing of financial advice; I do not think that there is any disagreement about that.
	Finally, there is the question of government as regulator addressing the issue of risk to rebuild trust and confidence in the pension system. That touches on some of the issues raised by the noble Lord, Lord Oakeshott, about the minimum funding requirement, the role of the new regulator and questions about wind-up—I welcome many of his comments about that. It also addresses the issue raised by the noble Lord, Lord Alexander of Weedon, about transfer.
	I understand that schemes are usually required to provide transfer value populations on receiving a request from a member. That time limit can be extended by the Occupational Pensions Regulatory Authority in all sorts of circumstances. It has currently decided to extend it until legislation is amended. Dependent on the outcome of consultation, regulations could come into effect before June. That may not have the significance suggested by the article in the Financial Times today but, if I have any further information, I shall be happy to write to your Lordships.
	Given the Government's role as provider, enabler, educator and regulator, there is one final role, which is, as I said, to help to build trust and develop partnership. That is why, as my noble friend Lord Lea said, we must all own the problem: employers, employees and the financial services industry as well the Government. We await the full responses to the Green Paper as we shape our response. I am sure that your Lordships' debate, which I thought was extraordinarily good, will help to inform that response. I thank your Lordships for that.

Lord Fowler: My Lords, I have only a minute or so in which to end the debate. I should like to thank everyone who has taken part. We have had 16 speeches from the Back Benches, which I cannot now go through, but they were all excellent.
	Twice the Minister raised with me the question of the £5 billion pension tax and what we intend to do about it. It is interesting that Ministers are at last asking about the policy of the next Conservative government; I welcome that. I am clear that it should be a policy aim to restore the tax advantage. That should be our aim. I am in no doubt about that; I hope that the Minister will note it. I must enter the caveat that Gordon Brown always mentioned before the 1997 election: obviously it depends on what kind of economy we inherit.
	I fear that I must tell the Minister that I was not convinced by her reply: I was not convinced on pension tax; I was not convinced that the Government fully appreciate the pensions crisis; above all, I was not convinced that the Government have the policies to meet the crisis. I give notice that we on these Benches will raise the issue again and again, but for this evening, I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Communications Bill

Brought from the Commons; read a first time, and to be printed.

Zimbabwe

Baroness Park of Monmouth: rose to call attention to the situation in Zimbabwe; and to move for Papers.
	My Lords, the head of the World Food Programme, James Morris, has described the situation in Zimbabwe as a humanitarian nightmare. I hope, after reviewing the records of the international bodies, to propose what could still be done to help a Commonwealth country where the people, brave as they are, are near to despair.
	Here is a country that, until two years ago, was the bread basket of southern Africa, with a sophisticated, successful economic and public infrastructure; with no race problems, and blessed with the rule of law. Its present collapse is attributed to land reform, which has been presented as driven by a just process of redistribution of land to the indigenous population. However, it has become an instrument of naked power enforced by paid young thugs. It is used for ethnic cleansing; it has destroyed the economy—inflation reached 280 per cent last month—and consigned more than 1.5 million African men, women and children who used to work on farms to starvation and homelessness. They are specifically excluded from the national food assistance programme.
	Meanwhile, the Africans from the communal areas were cynically exploited to drive farmers off their farms. They were each given a few hectares of land for subsistence farming without seeds, tools or, above all, title, until they, too, were driven back to the communal areas to starve, as Ministers, soldiers and party members took over the farms.
	This, not drought, has led to the famine. The rule of law has been destroyed. The police, public servants and the courts have all been taught that Mugabe is the law and the party is the law. As well as rampant corruption, there is no justice. Others will speak today of the horrific breaches of human rights, from torture and rape to the brainwashing that is now conducted in camps by the feared Green Bombers, who are now forcibly indoctrinating teachers, a much-respected profession.
	According to a farm orphan support trust set up in 1997, 47 per cent of the population was at that time 15 or younger; 26 per cent of the adult population was HIV positive; the orphan population was growing by 60,000 children each year, and, by 2003—this year, my Lords—one third of all children under 15 years of age would be orphans.
	The first thing that AIDS victims ask for is food for their hungry children. In Zimbabwe there is none. According to the World Food Programme,
	"nationwide shortages of basic commodities and fuel, high parallel market prices and runaway inflation are a formula for disaster. More than half of Zimbabwe's 12 million people are now living with the threat of starvation. We are seeing hunger-related diseases. Children have dropped out of schools. Desperate families in rural Zimbabwe have resorted to eating wild fruits and tubers, some poisonous, just to survive. The government has declined permission for us to conduct nutritional surveys that would help target what resources we have to the hardest hit areas . . . Food is seen as a weapon in domestic politics".
	James Morris made that statement before the Senate Foreign Relations Committee last month.
	So what have we done and what could we do to help? The Commonwealth sent only 42 observers to do the one thing that Zimbabwe needed then—to tell the world what was happening at the elections. Of the troika appointed to review Zimbabwe's suspension from the Commonwealth, the two African members, in the face of disaster, take the view that things are getting better; that the land programme has been a success and all that remains to be done is for the British Government to pay compensation for the land. They say that Mugabe has set aside 4 billion Zimbabwean dollars—no doubt at parallel rates—to pay for improvements in some happy future. Zimbabwe, they say, should be allowed back into the Commonwealth.
	What about the EU? The French had no difficulty in pursuing their own agenda in Africa by inviting Mugabe to Paris, since Article 3.3 of the original Common Position on Africa of February 2002 had always allowed member states to admit those on the prohibited travel list,
	"on the grounds of attending meetings of international bodies or conducting political dialogue that promotes democracy, human rights and the rule of law in Zimbabwe".
	Mr Chirac, before an audience in which Mr Mugabe was by no means the only corrupt tyrant present, spoke movingly about their obligations to behave well. Perhaps the Minister can tell us what success we have had in sequestering assets.
	What about G8? The statement on the G8 summit last year made no reference to Zimbabwe but celebrated the establishment of NePAD, the African-led initiative that,
	"puts good governance at its heart. African countries have pledged to raise standards of governance and have committed themselves to a peer review mechanism".
	Presidents Mbeki and Obasanjo rightly called the event a historic moment for Africa.
	The strategy of HMG has been quiet diplomacy—I respect their reasons—working through the SADC countries most affected by the collapse of Zimbabwe, especially South Africa, the architect of NePAD. They have accepted the argument that it is an African issue to be settled by Africans. It would seem reasonable for the NePAD peer-review mechanism to be used and for the good governance policy to be related to Zimbabwe. But that has not happened, because all along there has been another player whose agenda is far from that of either the G8 or the EU—Libya. As President Mbeki explained to the G8 representative last November, the African Union is the supreme African institution, and NePAD is merely its socio-economic development programme, drawing its authority from the African Union. The peer-review mechanism, to which countries submit voluntarily, is an AU mechanism. There are others, including the Constitutive Act, the African Parliament, a commission on human rights, which all seem more appropriate than NePAD for political action. President Mbeki said that NePAD could not place itself above African continental law. He suggested that African countries were being invited to treat the AU, the parent of NePAD, as a dangerous irrelevance.
	I fear that that puts paid to the policy of hoping to work through NePAD to help Zimbabwe, for Gaddafi is Mugabe's dearest friend. Nor is it reassuring that President Mbeki, as president of the Non-Aligned Movement, secured Mugabe a unanimous vote of confidence at a meeting in January, together with a motion blaming the,
	"grave humanitarian situation in Zimbabwe",
	on drought, the IMF and the World Bank.
	It is a final irony that South Africa and the African Union bloc recently pushed through the appointment of Libya as Chairman of the UN Human Rights Commission.
	I suggest that nothing will be done to help Zimbabwe to help itself through the Commonwealth, through NePAD, if its true status is that of a mere arm of Gaddafi's African Union, or through an EU in which too many have their own African agenda.
	So what about the UN? Throughout 2002, there was not one single motion or speech on Zimbabwe in the Security Council or the General Affairs Council by the UK, South Africa or Nigeria. Naturally, I hope that discussions were going on behind the scenes. The Secretary-General's January 2003 press conference made brief reference to Zimbabwe, attributing its crisis to the forces of nature and mismanagement and adjuring Zimbabweans to work together.
	However, Zimbabwe has at least surfaced in the Security Council's Resolution 1457, which mandates the UN investigative panel on the plundering of resources in the Democratic Republic of Congo by the Zimbabwean army and government, among others, to investigate further. It requires the Government of Zimbabwe to co-operate and invites all those named in the report to respond by 31st March. The Security Council notes:
	"The elite networks involved in resource exploitation (top army commanders, businessmen and government structures) are changing their tactics as national armies begin withdrawal from the eastern Congo—the government of Zimbabwe had adopted strategies for maintaining the mechanism for revenue generation, many of which involved criminal activities once their troops have departed. They seek to maintain their grip on the main mineral resources and have transferred ownership of at least US$ 5 billion of assets from the state mining sector to private companies under their control in the past 3 years".
	The path that Zimbabwe's friends should now choose is to bring the full force of the UN to bear, using the power and resources of the United States, which is there to be harnessed. That should be done on humanitarian grounds, which cannot be gainsaid—nor should they be ignored by the UN. Those grounds will necessarily include the trauma arising from the acts of genocide, torture and the use of food as a political weapon; from the collapse of the rule of law; the urgent HIV/AIDS crisis and the famine daily more apparent.
	The UNDP has representatives on the ground, and the Government have just carried out their own audit on the land reform, on which the UNDP was originally to advise in 1998. The World Food Programme is closely engaged. The UN Rapporteur on Human Rights has recently reported on the attacks on the judiciary. None of that could be enough, given the present preoccupation of the UN, and indeed of the world, with Iraq, if it were not for that potential engine for action, the United States, and the present active engagement with the process of James Morris, Walter Kansteiner at the State Department and Andrew Natsios, the head of USAID. All those powerful men want to arrest the collapse of the country and to restore the rule of law before Zimbabwe becomes a black hole in Africa. We should be acting with the UN, sending in humanitarian monitors, and working with the World Food Programme to arrest famine, to fight AIDS and to cast, above all, through that international presence, a bright light on oppression, torture and corruption. It would not be a political intervention; it would be a humanitarian one. It is the last hope of many innocent people.
	Should President Mbeki, and others, claim that the world is setting aside the mandate of the people at the 2002 elections, which his observers pronounced free and fair, perhaps we might remind him of the recent evidence sedulously concealed by Mr Mugabe's registrar-general. It showed that, while the electoral roll contained 5.2 million names, increased before the election to 5.6 million through additional illegal registrations, census data showed that in August 2002 there were only 4.2 million adults in Zimbabwe—very interesting.
	What can we do here and now in our country? First, why have we denied asylum to all but a handful of the Zimbabwe citizens—white and black—who are trying to come here to escape torture and persecution? They are citizens of a Commonwealth country. Until recently, Zimbabwean teachers, now under grave threat, taught the British educational curriculum. They speak fluent English and could at once help with our teacher shortage. Zimbabwe nurses and social workers are equally immediately employable. Why could they not come initially for a two-year period, as, it is reported, the Home Secretary has considered offering to encourage workers from Turkey? The danger for the Zimbabweans is far greater than that faced by any Afghan, and they could at once be useful and self-supporting citizens.
	What about the 7,000 to 8,000 British pensioners in Zimbabwe, many of them ex-servicemen and ex-servicewomen, who receive their pensions through the bank at the official rate—at present 85 Zimbabwe dollars to the pound, although the true or parallel rate, constantly rising with inflation, is 2,500 Zimbabwe dollars to the pound? Their pensions are virtually worthless and do not buy even one meal a day, let alone pay their costs in retirement homes or buy the medicine that they need. There is no NHS. Some have killed themselves; all are in dire straits. I can give many more examples of suffering and destitution, but time does not allow.
	At the behest of the Treasury, the High Commission charges for passports and visas at the parallel rate. What will Her Majesty's Government do to secure the same rate for pensions? As the Minister knows, I intend to press the issue further in a Question in 10 days' time, so I do not expect an answer now. Nevertheless, it is an urgent issue. Should those UK citizens, by some miracle, find the millions of Zimbabwe dollars needed to come to this country, they must still, although holding UK passports with the right of abode, prove entitlement to habitual residence. If they can do so, it will take them anything from four to six months and sometimes more, spent filling in complicated forms and being interviewed. During that time, their sole entitlement is the right of abode.
	There is no provision whatever for any of those UK passport holders to be given even temporary accommodation, let alone money for food, even if they are destitute. Asylum seekers, on the other hand, receive those things at once, without question. The only help that the UK citizens will receive, if they are, for instance, ex-servicemen, will come from the Royal British Legion, if they are in contact with that organisation. If they are, the help is prompt and effective and is funded by service benevolent funds and charities. Why does the state acknowledge no responsibility? Why are such people not provided, on arrival, with guidance on where to go for help, as the state has disowned them? What does being a British citizen mean, if not help in time of trouble?
	I urge the Government to act at once to give preference to Zimbabwe citizens seeking asylum. They must find a way to restore the value of pensions for UK citizens in Zimbabwe or to provide immediate financial support, and they should give at least the same support with accommodation and benefits to UK citizens arriving in this country destitute as is given to asylum seekers. Something must be done now, and such things lie within our national power.
	No one marches for Zimbabwe in this country: let us begin to do so. Far from allowing Mugabe to warn us off as ex-colonialists, we should remember that we have a particular duty to Africa. That is something that we should neither forget nor allow other people to forget.
	I add one postscript: according to The Times today, out of 39 people released after four days in prison for demonstrating against the Government after a cricket match, one woman prisoner was unaccounted for and 26 detainees had been held in a cell meant for six, in which they had been unable to lie down. That is what is happening in Zimbabwe today. My Lords, I beg to move for Papers.

Lord Acton: My Lords, I congratulate the noble Baroness, Lady Park of Monmouth, on introducing the debate.
	I was brought up on a maize farm in southern Rhodesia. The farmworkers' families, like black Zimbabweans today, cooked maize meal—known as mealie meal or sadza—as their staple food. My eldest sister married a tobacco and maize farmer, and three of their sons followed in his footsteps. Last year, their farms were taken away, and they have scattered to New Zealand, Hungary and Zambia. One of my nephews was a champion maize grower; now he and nearly all his fellow maize-growing commercial farmers have vanished, leaving a vast hole in Zimbabwe's food supply.
	The situation last season was made worse by poor rains, particularly in Matabeleland and Masvingo. Thus, although the harvest of May-June 2001 produced nearly 1.5 million metric tonnes of maize, the harvest of May-June last year shrank to only a third of that—just under 500,000 metric tonnes. With an annual requirement of 1.6 million metric tonnes, the government used scarce foreign currency to buy maize abroad. However, not nearly enough was imported, and generous international donors, led by the United States followed by the European Union, especially Britain, stepped in. To prevent starvation among the 7.8 million at risk, the donor countries acted through United Nations programmes and non-governmental organisations in Zimbabwe.
	As the noble Baroness said, the ghastly situation has been exacerbated by HIV/AIDS, which infects 34 per cent of the population. Without decent nutrition for the people, the disease spreads. Lack of food causes those with HIV to get AIDS. AIDS kills 2,000 to 2,500 Zimbabweans every week.
	For this year, the Zimbabwean Government estimate that the maize harvest in May-June will rise slightly, to 550,000 metric tonnes from the abysmal 500,000 tonnes last year. However, informed sources suggest that, with the massive decline in commercial farming and poor rains yet again, the crop will go down by a quarter, to a dreadful 380,000 tonnes. Some 1.6 million tonnes are needed. That is a disaster.
	Things are even more catastrophic. Commercial farmers used to grow about 340,000 tonnes of winter wheat annually. This August-September, the wheat harvest will be practically non-existent. Moreover, without the growers, the tobacco crop, which provided much of the foreign exchange to buy maize abroad last year, will collapse. Informed sources in Zimbabwe believe that 10 million people will be at risk of lack of food by Christmas. Only international donors can save them.
	Britain has been exemplary in its generosity. In an Answer to a Written Question published in yesterday's Hansard, the Minister tabulated the contribution made by each European Union country to Zimbabwe for 2002 in millions of euros. The European Union as a whole gave 156.4 million euros, of which Britain's share was 68.6 million, Germany's 25.6 million, France's 14.6 million and Portugal's 1.2 million. I look to Britain once more to give a lead to the European Union's donations this year. However, I look to the British Embassy in Paris to talk to the French. If France is going to pursue its interests by entertaining Mr Mugabe and his entourage, it should do not half of what Germany does but more than Germany does to prevent starvation among Mr Mugabe's fellow Zimbabweans. As Portugal tried to invite Mr Mugabe to the now postponed European-African summit in Lisbon next month, the British Embassy should suggest that Portugal provide more than 1.2 million euros to feed Mr Mugabe's fellow Zimbabweans.
	In December, the United States Administration pledged a further 100 million dollars, over and above its already impressive contribution, for food aid to Zimbabwe, Malawi and Zambia. That is a useful start to the 2003 campaign to feed Zimbabweans. There is enormous interest in Zimbabwe and Zimbabweans in Britain, in Parliament and in the media. Britain should do all that it can to give aid and should do all that it can diplomatically to spearhead an international campaign, so that Zimbabweans will have enough mealie meal to eat this year.

The Lord Bishop of Rochester: My Lords, I, too, express my appreciation to the noble Baroness, Lady Park, for bringing Zimbabwe to the attention of your Lordships' House, especially in the prevailing climate. Many noble Lords will have seen the recent Guardian report about the arrest of clergy from different churches. They were demonstrating in Harare against police brutality and, not surprisingly, they were promised some for themselves! More and more Church leaders are joining the Roman Catholic Archbishop of Bulawayo, Pius Ncube—a brave man—in resisting the unlawful actions of the Mugabe regime. Many will have been deeply affected by accounts of the service in Bulawayo cathedral where opponents of the regime gave graphic details of the treatment meted out to them by the security services. Such courageous Church and community leaders deserve international support and a platform for their views.
	It must be admitted, however, that there is quite another kind of Church leader. There are those who have been placed in leadership by the regime itself and those who are actively collaborating with it. That kind of leadership has forced the diocese of Rochester to suspend our longstanding link with the diocese of Harare. We regret that very much; it has caused us deep grief. Unprincipled collaboration has divided the Church in that diocese, diverted resources from where they are most needed, and dispersed clergy and faithful in a wholly destructive way.
	Even in such adverse circumstances we have tried to continue helping those in most need. An order of Anglican nuns runs a centre for orphaned children who are also HIV-positive. Along with Zimbabwean Christians, we continue to support them. Hyper-inflation has already been mentioned; it is a result of what passes for economic policy in Zimbabwe these days. The elderly have seen their life savings melt away. They need support. Happily, it has proved possible for us to support some of them, even if in a small way.
	Through the Just Children Foundation, we have been able to continue assisting work with street children and, through the Zimbabwe Development Trust, with displaced farm workers who have suffered a great deal. A feeding programme, involving our mission partners from Crosslinks, was rudely disrupted when they were suddenly expelled from the country, without explanation. That is another sign of the complete unreasonableness of the Mugabe government.
	However, the lesson is that effective assistance can still be delivered through non-governmental organisations, especially church-related ones, and through the United Nations. That has already been mentioned. There is evidence that food aid through government channels is being used for political purposes and to starve opponents into submission. Food is, indeed, being used as a weapon.
	Our partners in Zimbabwe tell us that the economic situation, with its food and fuel shortages, as well as international pressure, is beginning to have an effect. Senior figures in ZANU-PF, in the military and in commerce are wondering whether it is worth their while to continue supporting President Mugabe. The advice we are getting is that the pressure must be kept up—perhaps increased—if the people of Zimbabwe are to be free. I was disappointed therefore to learn that the Commonwealth is not really taking any constructive initiatives in this area. Perhaps I am wrong; I would be pleased to be told that.
	When the people of Zimbabwe are free, that will be the time for national reconstruction. No doubt the Churches of Zimbabwe will be in the forefront. As their partners we, too, pledge our support for the rebuilding of their beautiful land. We pray that it will happen soon.

Lord Blaker: My Lords, I, too, congratulate my noble friend Lady Park both on initiating the debate and on her speech. Zimbabwe was suspended from the councils of the Commonwealth for a year, which expires on 19th March. In that time, matters have worsened in Zimbabwe in just about every field. That has already been made clear in the three excellent speeches so far today.
	The gross domestic product has fallen by 27 per cent in the past four years. Yesterday, the Government of Zimbabwe published a proposal for the development of the economy in which they took pride that the economy was expected to contract—I repeat, to contract—by only 7.8 per cent this year. I am pleased to add that the electoral roll used for the last election has recently fallen into the hands of the opposition in Zimbabwe and it indicates that there were 1.8 million phantom voters on the electoral roll.
	My noble friend Lady Park said that Mr Mbeki, the President of South Africa and Mr Obasanjo, the President of Nigeria, proposed that Zimbabwe should be reinstated to the Commonwealth. Moreover, they declined to meet the Prime Minister of Australia, who is the chairman of the Troika. I emphasise that there is not a shred of a case for reinstatement of Zimbabwe to the councils of the Commonwealth at present.
	Mr Mbeki claims that it should be left to Africans only to deal with the problem of Zimbabwe. There are some organisations—SADC, NePAD, the African Union—of which only Africans are members. I shall return to them, but they are not doing much about the problem of Zimbabwe at present. However, in the Commonwealth, such a matter is for the Commonwealth as a whole. The Commonwealth cannot have one rule for Africa and another for all other continents which contain members of the Commonwealth.
	The observance of the principles of the Commonwealth is a matter for the whole Commonwealth. Moreover, if Mr Mbeki thinks about it, his proposal is a bad one for Africa. It would be understood to imply that Africa cannot live up to the standards observed by the rest of the Commonwealth members, and that Africa should be subject to more lenient rules, as a type of second 11. I do not recall Mr Mbeki saying that human rights in Africa should be left to the Africans only when western countries, including ourselves, were helping to eliminate apartheid in his country.
	I shall welcome clarification on this point by the Minister in her reply: if no agreement is reached by the Troika regarding Zimbabwe, I understand that suspension will continue until the heads of government meeting in Nigeria in December. If the situation remains as now—or anything like—it is vital for the future of the Commonwealth that the suspension of Zimbabwe continues.
	My next point is that the situation in Zimbabwe appears to be damaging the whole of southern Africa. I have a report dated 13th February from Reuters in Johannesburg, which indicates that while foreign direct investment flows into South Africa in 2002 were up a little compared with the preceding year, such flows into the other 14 member countries of SADC in 2002 dropped to 1.09 billion dollars, compared with 6.63 billion dollars in 2001. That is an astonishing figure. I should appreciate clarification on that point from the Minister if she has any knowledge of it. It seems to me amazing but possible, given the lack of confidence which must exist in investors in southern Africa as a result of the situation in Zimbabwe. It is true that the opinion of informed commentators and business people in southern Africa is that the worsening situation in Zimbabwe is harming the economy of SADC as a whole.
	SADC, NePAD and the African Union all call for good governance, the rule of law, the observance of human rights—and peer pressure by those organisations to observe those three principles. It is astonishing that the countries of southern Africa do not appear to be exerting that peer pressure. Perhaps something is going on behind the scenes. Perhaps the Minister can comment on that in her reply.
	We all know that South Africa could turn Zimbabwe on to a better path in weeks if it wanted and tried to do so. Is it doing anything to that effect? The impression given by the countries of SADC is that they are sleepwalking into poverty.
	I have a final question. Do not the G8 governments have a duty if only to their taxpayers to ensure that the economic aid that they give to NePAD countries is not wasted? What is the policy of the G8 countries towards NePAD regarding aid in the face of this critical situation?

Lord Hughes of Woodside: My Lords, I congratulate the noble Baroness, Lady Park of Monmouth, on introducing the debate. It is important in times of great international crisis that we do not allow Zimbabwe simply to drift from international attention. My noble friend Lord Acton illustrated the gravity of the food situation. The right reverend Prelate the Bishop of Rochester and noble Lord, Lord Blaker, also described its seriousness.
	Perhaps I may be forgiven for mildly chiding the noble Lord, Lord Blaker, but it is "President" Mbeki, and I believe that he should always receive his proper title. The reasons are important. People are most sensitive at present and we do not want suggestions of paternalism. I am sure that that was not his intention when he questioned interpretation.
	We know that the situation is difficult and is getting worse. I am worried in particular that opinion in Africa and in the developing world is turning against the position that we in this House and the Government are taking and moving in favour of President Mugabe and ZANU-PF. That may lead to a severe rift in the Commonwealth.
	Two weeks ago in the Jubilee Room in the House of Commons I chaired a meeting at the launch of a pamphlet entitled Zimbabwe on the Brink, written by Glenys Kinnock MEP. Also present was Derek Wyatt, the MP for Sittingbourne and Sheppey. In his remarks, Derek Wyatt said:
	"Our democratic values are important".
	I would have thought that a wholly uncontroversial statement. But someone in the audience, not at all sympathetic to ZANU-PF, said that we should be careful about using the phrase "our democratic values" as it suggested some kind of colonial importance. It suggested that we were trying to force our democratic values on the people of Zimbabwe and elsewhere in Africa. I reminded the audience, as I remind this House and as I hope those who read the debate will be reminded, that when we marched through the streets of Whitehall in the company of Didymus Mutasa and Edison Zvogbo, both leading members of ZANU at the time, to protest at the activities of the Sealous Scouts in southern Rhodesia; when we campaigned on the slogan "No independence without majority rule"—NIMBAR, for short—it was not on our values and their values. We all shared the same values, especially ZANU-PF and ZAPU.
	When we protested at the murder of Steve Biko and at the secret trials, and at Sharpeville and so forth, it was not our values and their values. When we took deputations to see the noble Baroness, Lady Chalker, who I am delighted to see in her place and who was Minister of State at the Foreign Office in the days of a government which I did not support, we received the greatest of support over and above her call of duty. I repeat my congratulations and support for her at that time.
	Their values and our values were the same. There was a right of free speech, of democracy and of the freedom of association. The Zimbabweans who marched with us in exile revelled in the opportunity of opposition and free speech. As they said on many occasions, they greatly valued the neutrality which the police showed during the demonstrations. There was no question about it—we all shared these values. We are not now saying that we want to impose our particular parliamentary system and democratic society on them. Heaven knows, as we know from recent debates there is no such thing as a perfect constitution. We are still bitterly arguing about ours, after hundreds of years of democracy. But the fact is that the principles of democracy must prevail and those in Zimbabwe must accept that.
	What is happening will affect not only Zimbabwe, which is bad enough, but I fear that it will severely affect the future of the Commonwealth. We know that the non-aligned movement, the SADC, has said that it has given too much support to Zimbabwe. If the troika reports that Zimbabwe should be returned to the Commonwealth, it can do so only on a split decision of two to one. I cannot see Australia supporting that. If it does not report and the matter comes before the Commonwealth in December, we will be faced with the question: what should the Commonwealth do? I fear that the Commonwealth will split along racial lines. That is why I say to the noble Lord, Lord Blaker, we must be careful in how we address these issues.
	We greatly value the position of South Africa and other countries in trying to resolve the problems in Africa, especially of Zimbabwe. I would be more than happy to stand back and let that be resolved by the South Africans and those around them. We are not interfering because we want to; we are becoming involved because we remember the past of Zimbabwe and we are determined to try to influence its future. Furthermore, we want to see the Commonwealth remain a united organisation.
	My noble friend Lady Amos has worked extremely hard within the Commonwealth and elsewhere to push the point of view that what happens in Zimbabwe is wrong and has to be ended. I believe that we should give her every support. We in this House cannot afford to divide on our aims because they are the same, even though we may differ slightly on how we should bring them about.
	The Commonwealth is not a cosy club; it is not a case of once every two years or whenever the Commonwealth leaders get together and have nice meals here and there. The Commonwealth is a real, living organisation which is essential for the prosperity and development of the countries in it. We want to see that continue. We live in extremely dangerous times, but above all the danger rests and has been borne by the people of Zimbabwe. We would let them down if we did not support them in every way possible.

Lord St John of Bletso: My Lords, I join in thanking the noble Baroness, Lady Park of Monmouth, for again raising this important subject in your Lordships' House. The increasingly dire social, economic, political and environmental crisis in Zimbabwe worsens by the day.
	With world attention currently focused on the impending war against Iraq, it is important that the ongoing humanitarian and political atrocities in Zimbabwe are kept constantly in the public spotlight. Sadly, too many people in this country and around the world have shrugged their shoulders over Zimbabwe, believing that nothing can be achieved to resolve the ongoing crisis. Certainly, sanctions have not so far worked.
	Yet how in all conscience can anyone do nothing, when more than 14 million people, including more than 7 million children, have been driven almost to starvation? While millions of Zimbabweans continue to yearn for peace, stability and a resumption of years gone by, when the country with its fertile lands was totally self-sufficient, I believe that the situation has in some ways progressed since we last debated the subject in your Lordships' House.
	Then, we wondered whether President Mugabe would step down and give way to a government of national unity. Now, by general consensus throughout southern Africa, the question is not whether he will go, but when. This has been the common theme for the three recent attempts to mediate a peaceful solution. The focus has shifted from when Mugabe will go to who will replace him and what transitional arrangements need to be put in place before new elections are held.
	The first of these mediation efforts was orchestrated by a former colonel in the Zimbabwe Defence Force, Lionel Dyke, who put forward a structure for a new government of national unity which was totally unacceptable to the MDC. The proposal offered two Cabinet seats to the MDC and suggested Emerson Mnangagwa as the new Prime Minister, with Mugabe staying on as the titular president. As Mnangagwa is alleged to have been involved in several dubious activities, including being one of the chief looters of the DRC and one of the chief architects of the massacre of the minority Ndebele tribe in the 1980s, this proposal was a total non-starter. The ANC in South Africa tried to improve the offer, but again it was totally unacceptable.
	Of more interest is the second attempt to find a path away from this crisis which has been made by Mjongonkulu Ndungane, the present Archbishop of Cape Town, the successor of Desmond Tutu. Acting in concert with the Institute for Justice and Reconciliation, an organisation based in Cape Town, the widely respected archbishop travelled to Zimbabwe four weeks ago and met with President Mugabe. It is understood that at this meeting Mugabe asked the archbishop to approach the British Prime Minister on the subject of land reform and unfulfilled promises from the Lancaster House agreement. I understand that this past weekend the archbishop was due to meet our Prime Minister and that he will again be meeting Mugabe on 12th March. Will the Minister elaborate on these discussions when she responds to the debate?
	While I am deeply critical of President Chirac for inviting Mugabe to attend the recent international conference in Paris, he clearly is using his best endeavours to mediate and broker a peaceful hand-over of power in Zimbabwe.
	However, an understandable response to these kinds of quiet diplomatic activities might be that, so far as concerns the suffering millions in Zimbabwe, the process seems to be taking a very long time to yield very few results. While the talking continues, Mugabe remains assertively in power. While the talking continues, food shortages across this naturally fertile land become more grave; fuel is now almost impossible to find; life-blood agricultural yields have been dramatically reduced; and the spread of HIV/AIDS, an issue raised by several noble Lords, is destroying many hundreds of thousands of lives.
	Despite the recent assurances of President Obasanjo of Nigeria that land seizures have, in his words, "substantially ended", and that law and order are returning to Zimbabwe, this is quite clearly trite nonsense. Zimbabweans are aghast as to how both President Obasanjo and President Mbeki can tolerate the torture and repression of fellow Africans in the name of the spurious concept of "African unity".
	However, the time for megaphone diplomacy has passed. The situation will not be resolved by trading insults with the tyrant. As the South African Foreign Minister, Nkosasana Dlamini Zuma, said this week, almost nothing will be achieved by shouting at Mugabe from a safe distance. It has become clear that the country's best hope of redemption lies in a process of quiet but persistent and firm diplomacy, most of which should be launched, driven and pursued from within southern Africa.
	I am aware that many people, both within Zimbabwe and outside, have despaired at the apparent reluctance of President Thabo Mbeki and his government to take a firm line towards Mugabe. Yet, in his discussions with our Prime Minister during his recent visit to this country, Mr Mbeki cogently explained the particular difficulty of his position. I believe that South Africa is committed to helping Zimbabwe to overcome the current crisis as calmly as possible and, at all costs, to avoiding the kind of violent insurrection that could destabilise the entire region with disastrous results, not least a flood of refugees crossing the Limpopo.
	President Mbeki's government have decided to maintain a policy of constructive engagement with their northern neighbour rather than join the global chorus of outrage and condemnation. My major criticism of, and concern for, the South African Government is that they have tended to try to legitimise ZANU-PF rather than uphold an even-handed approach to both the ZANU-PF and MDC parties.
	I am aware that Her Majesty's Government, particularly the Minister, have been playing a pivotal role in supporting the diplomatic initiatives process in a way that seeks to neutralise the "colonial sympathy" button that Mugabe has attempted to push at every opportunity. I warmly and wholeheartedly support the call of the noble Baroness, Lady Park, for a strong UN resolution on Zimbabwe.
	I believe that Britain's central role in the evolution of Rhodesia to independence and beyond leaves us with certain specific obligations. I again urge Her Majesty's Government to consider the possibility of compensating farmers who have been violently thrown off their land, provided this is conditional on an acceptable political solution leading to a transitional authority.
	The pace of any progress towards resolution of the crisis will seem too slow to those people who are still being deprived of food and basic human rights, yet I do believe that progress is being made.

Baroness Chalker of Wallasey: My Lords, I, too, am grateful to my noble friend Lady Park of Monmouth for introducing the debate. I congratulate her on making the House focus once again on Zimbabwe. I hope that she will continue to do so.
	I have read, seen and, above all, listened to as many horror stories as anyone about the sad situation in Zimbabwe. I have just returned from southern and west Africa, and while in southern Africa I heard from many people who are able to leave Zimbabwe, and from others who travel in and out of Zimbabwe, of some of the things that are going on. I, too, had the pleasure of speaking with the Archbishop of Cape Town about the efforts that need to be made to find a way forward.
	I shall not repeat the horror stories—there are enough in the papers if anyone wants to read about them—but I shall try to analyse what is going on and consider the way forward. However horrific, wrong and terrifying the treatment of those who do not agree with the people doing the bullying in Zimbabwe, we cannot change the past; we have to set a path forward. How we can do that is one of the difficulties that we face.
	There are many misconceptions and misunderstandings, and there is a great deal of misinformation going round, so let us look at the basis of the situation. Through my former responsibilities I have known the President of Zimbabwe and many of his Ministers for more than 16 years. In recent months I have often questioned whether those Ministers know about the reality of the frequently brutal treatment being handed out to ordinary Zimbabweans, both black and white; about the denial of food to non-ZANU-PF card-carrying members of the ordinary public.
	It is the ordinary Zimbabweans and southern Africans from all walks of life who are repeating the reality of what is happening on the ground, and therefore I cannot believe that those Ministers are unaware. I believe that they have got themselves into a veritable corner and cannot see a way out which allows them to survive. They are therefore resisting all entreaties. The people that I listen to are not politicians but ordinary Zimbabweans who truly know what is happening.
	There are groups at work in Zimbabwe—my noble friend Lady Park has mentioned one such—which are completely out of the control of the government. There are elements of lawlessness that are out of any control whatsoever. I refer to the youth leagues, locally known as the "Green Bombers", who are behaving in a way never before experienced, except in the bad old days in Zimbabwe years ago.
	These young people go into camps for so-called training but, while in the camps, they develop the most vicious habits against anyone who does not agree with them, even their parents. They behave in a totally unacceptable way against those who are strong enough to remain silent in the face of enormous provocation, as has happened to some members of the clergy in Zimbabwe in recent weeks. I understand that even the elders of ZANU-PF are now worried about what has been let loose with these young people, who are totally out of control. Controlling these young people would be one step forward, which only the Zimbabwean Government can take. They have a well-trained army, in whose formation this country played a large part. They can and should be taking this action. I do not plead with President Mugabe—it is not my way—but I believe that if the Zimbabwean Government want to gain understanding outside, that is one step that they can take.
	Ordinary people who express their views are now arrested, such as those at cricket in Bulawayo last Friday. Some have since been released, but many have been detained in prison for more than 48 hours with no food and have not even been taken to court. This is quite outside the rules which existed in Zimbabwe post-independence but which have now been turned on their head. That is another action that the Government of Zimbabwe could take. I know this from the captain of the English Cricket Board, who was speaking on television in South Africa this morning.
	The other thing that needs to be done is to correct the appalling restriction on the humanitarian agencies doing their work. They are seeking to alleviate the malnutrition and starvation in the country, particularly in the areas where there is no affiliation to ZANU-PF. That is an action which the whole world is waiting for.
	The economy is in a deplorable state. We do not have time tonight to debate what has gone wrong; we have heard it before in this House. Above all, one is concerned about the once-buoyant agricultural sector, where the outlook is now so bleak. The national demand for maize is about 1.8 million tonnes. The disrupted planting in the last planting season plus the drought and the late rains last year mean that, at best, the maize fields will yield about 700,000 tonnes. That is a further depletion in food resources. Only four years ago Zimbabwe was a net exporter of maize and a key supplier for the World Food Programme.
	One can go on about all the horrors of Zimbabwe. One of the critical needs is to get information about Zimbabwe to other members of the Commonwealth. In that way, perhaps President Obasanjo, President Mbeki and their Ministers will find out what is really going on. I can say from my experience with Ministers in the South African Government only 10 days ago that they do not know what is going on.
	Finally, for the sake of ordinary Zimbabwean people, I believe that we need to have a widely drawn group of Africans and others—perhaps, as my noble friend Lady Park of Monmouth said, under a UN banner—to assist a cross-section of Zimbabwean leaders to guide the restoration of law and order, to make sure there is equitable distribution of food and medicines and, above all, to re-establish sound economics in that country.

The Earl of Sandwich: My Lords, in a country which has seen only victims, the dignity of the silent protest of Andy Flower and Henry Olonga on the cricket field has been one of the few encouraging spectacles in recent weeks. Another has been the recent peaceful demonstrations by Christians in Bulawayo and Harare, recalling so many similar events in apartheid South Africa. They show once again that people matter and that even the worst tyrannies are unable to stifle the right of every citizen, of all races and beliefs, to make their views known.
	Less edifying, as we heard from the noble Lord, Lord Acton, and others, has been the government's published scoreboard of Zimbabwe's maize production. This shows the worst total for a decade last year, with large-scale farming having produced its lowest total of 270 kilotonnes, while the figure for small farmers, who are the intended beneficiaries of land redistribution, stands at only 388 metric tonnes, less than one-third of their 2000 total. This convincingly shows the masquerade of President Mugabe's so-called reforms, not to mention his racism, anti-colonialism and disregard for any democratic process.
	The figures are becoming all too familiar. With large areas of commercial farming now idle, the Grain Producers Association is predicting 1.6 million tonnes of maize only this year. More than 7 million people—over half the population—are defined as "food insecure" by the World Food Programme, and aid agencies are reaching only about 2.2 million of them. The situation is becoming more and more critical, especially for the poorest rural families.
	There is even some concern about the amount of seed being consumed rather than planted. There are worrying signs of malnutrition. The vicious spiral of HIV/AIDS has further weakened the population to a point we can barely imagine.
	There is no let-up in illegal farm evictions. Section 8 notices have been served on more than 40 farmers in the Karoi-Tengwe area, requiring farmers to cease operations and vacate the property within 90 days—this in spite of the government's assurance last August that land invasions would cease. The number of remaining commercial farms is now between 600 and 1,000, compared with about 4,400 when the land reform programme started.
	One report from the famine early warning systems network says that about 1 million people have been affected by land reform and resettlement, with many farm workers lacking the proper equipment to start farming on resettled land. Increasing cases of destitution among the farmworkers and resettled farmers in Mashonaland, Matabeleland and Masvingo are now being assessed by WFP.
	It is well known that ZANU-PF is making use of food aid for its own purposes. We received the assurance that none of this diverted food comes from any UK source, since our Government work only through the NGOs and international agencies. However, greater clarification is needed about food coming through the World Food Programme to which the UK is a leading contributor. I understand that even imported food has been put up for sale through the state grain marketing board monopoly, thereby benefiting party funds and bypassing the private sector. Some grain is also apparently being sold in Zambia in return for hard currency. Has the Minister received or will she request any comments from WFP, since presumably this food, which is now monetised, cannot be categorised as humanitarian aid?
	Meanwhile, the public order legislation continues to ban almost all political activity. The Access to Information Act gags the press and distorts the media in favour of the regime. As we heard from the noble Baroness, Lady Chalker, ZANU-PF youth militia are trained to commit acts of violence. The police are routinely aggressive against members of the public. We know from the press about the arrest of Job Sikhala, the MDC MP for St Mary's and four other men, all of whom were beaten on the soles of their feet and tortured with electricity. Despite investigations ordered by a magistrate and questions asked, the men's statements have been ignored by the police and no action is being taken. In February, High Court judge Benjamin Paradza was goaled overnight without any inquiry being ordered.
	The World Cup last Friday saw another example of police brutality. We have heard of the 17 clergymen who were held for eight hours in Harare merely for trying to present a petition complaining about police harassment, which has been a growing concern of the Church, as the right reverend Prelate the Bishop of Rochester said. Archbishop Pius Ncube of Bulawayo has been joined by several other leaders in speaking out against new outrages committed by the police in the name of public order.
	Vote rigging has also been mentioned. Later this month two by-elections are due to take place in the Harare townships of Highfield and Kuwadzana, and already there are reports of intimidation and fraud. One report says that thousands of new voters have been added to the Kuwadzana roll, many of them from outside the constituency or phantom names. The noble Lord, Lord Blaker, mentioned that there is new evidence that last year's national elections were rigged. Morgan Tsvangirai was surely right to remind the world recently:
	"These pillars of tyranny are a clear violation of the Harare Commonwealth Declaration and they constitute the basis upon which the Commonwealth successfully indicted the Mugabe regime, through the report of the Commonwealth Observer Mission".
	That was in his open letter to John Howard on 17th February.
	I still believe in the importance of the Commonwealth, devalued as it has been, but I have to admit that the troika has had little impact on President Mugabe, mainly because of his old links with President Mbeki. I accept the caution of the noble Lord, Lord Hughes, and of my noble friend, but Mbeki's quiet diplomacy has exasperated Zimbabweans by its empty promises.
	All Africa knows that the British Government are powerless to influence the course of events in Zimbabwe because of their colonial past and, more pertinently, their failure to deal adequately with the land issue not during, but after, the Lancaster House agreement. I look forward to hearing from the noble Lord, Lord Thomson, on that. The US is too obsessed with tyrannies elsewhere in the world to bother with Africa. So we are left with the EU, which is the only viable channel for effective sanctions.

Lord Moynihan: My Lords, I am grateful to my noble friend Lady Park for securing this debate on Zimbabwe and for the many insights that, as always, her expert knowledge brings to bear in this House.
	Today, when we might have hoped that the conflicts of the past were an ever more distant memory, instead Zimbabwe is a nation of instability, of land crisis and of violence, with a rampant AIDS problem and a devastated economy. It is difficult to see how the country can resolve the enormous challenges that face it when its fortunes remain tied to those of its leader, Robert Mugabe. We must face the fact that, despite the warmth of President Chirac's handshake, Zimbabwe is slowly bleeding to death as a nation, both politically and economically. It is a country careering towards economic collapse and it is not clear how much more ordinary Zimbabweans can take before the situation implodes in some way, with potentially dire consequences for the stability of southern Africa.
	Those in Zimbabwe who believed that things could not get worse at the beginning of 2002 have been proved wrong. There has been a drastic deterioration in the past 12 months in all senses. The economy is unwinding before our eyes and looks set to weaken further this year. Inflation is over 200 per cent. Interest rates are unsustainably low and unemployment is more than 70 per cent. The Zimbabwean dollar is one of the worst performing currencies in the world. A tube of toothpaste in Zimbabwe now costs 1,500 Zimbabwe dollars—27 US dollars at the official exchange rate. Tourism is down by 80 per cent since 1999. Hundreds of businesses have closed. Foreign investment has dried up and aid has been frozen.
	The most distressing fact is that it could all have been avoided. The economic decline has largely been caused by year upon year of government corruption and mismanagement, compounded by disruptions to the vital agricultural sector through the Mugabe regime's land redistribution programme. Government-sanctioned invasions of commercial farms by their supporters have resulted in thousands—I repeat, thousands—of normally productive farms lying idle, precipitating a collapse in investor confidence and capital flight. As a direct result, Zimbabwe today is gripped by a preventable humanitarian crisis and a famine, brought about by the policies of one man—Mugabe.
	The situation in Zimbabwe is beyond mere international concern and ineffectual hand-wringing. It demands a coherent strategy for action, formulated and agreed by the international community. Yet instead, the international community on occasions appears gripped by a strange combination of paralysis and denial, which is allowing Robert Mugabe a free rein for his megalomania. By putting Morgan Tsvangirai on trial for treason, he has now ensured that his key political opponent is not just fighting for his political existence but literally fighting for his life.
	It looks increasingly as though the Commonwealth will not renew Zimbabwe's suspension from its councils, which followed Mr Mugabe's controversial re-election last March. Instead, Zimbabwe may be welcomed back into the fold. President Obasanjo of Nigeria and President Mbeki of South Africa—both members of the troika in whose hands the decision rests—have indicated that Harare's one-year suspension should not be extended when it ends in two weeks. I am sorry, but I do not support the cautious optimism of the noble Lord, Lord St John of Bletso.
	Mr Mugabe's visit to France last month and his red carpet treatment made a mockery of the EU sanctions regime. The logic of allowing Mr Mugabe to travel to Europe to prevent him from travelling to Europe has escaped many people, myself included. The Secretary of State for International Development was right to call it a tacky deal with France. I hope the Minister will endorse that sentiment tonight.
	Can the Minister give assurances that the Government have made it clear to the French Government in the strongest possible terms that by allowing Mugabe to visit Paris last month their actions totally undermined the West's condemnation of human rights abuses in Zimbabwe? The actions of the President of France should be held in contempt. It would be an irony indeed, given that human rights abuses are being cited as a justification for military action in Iraq.
	President Chirac's invitation to Robert Mugabe demonstrates how risible attempts to formulate a meaningful European common foreign policy have become. I deeply regret that. I hope the Minister will say what implications she believes this episode has for such a policy. When a ruthless torturing dictator and his wife are free to go shopping in Paris, the French Government allow a travesty to be made of the values on which the European Union was founded.
	We have had a long and complex historical relationship with Zimbabwe. Many Zimbabweans are of British descent. We cannot afford to be portrayed as the interfering colonial power. We have not been so for many years. Yet nor can we ignore the plight of a country with so many ties to Britain. We should not be afraid to speak out, silenced by a lingering sense of post-colonial guilt, and to allow ourselves to sink into the policy of silence and craven acquiescence as a result. We should lead international opinion and work with Zimbabwe's neighbours. The time to act is now, before ordinary Zimbabweans suffer any further, or else future generations will not judge us kindly. We cannot allow our present preoccupation with Iraq to give Mr Mugabe a window of opportunity to outmanoeuvre us and to drive Zimbabwe further into despair. We have a role to play in ending the food shortages, in assisting Zimbabwe's economic recovery, in the restoration of political stability, in the return to respect for the rule of law and in ensuring free and fair future elections, if the Government have the will, the statesmanship, the courage and the judgment to recognise and pursue that role vigorously.

The Duke of Montrose: My Lords, I thank my noble friend Lady Park for giving us the opportunity to think and talk about the Zimbabwe situation. I declare an interest as having been born in Zimbabwe and having left before I was two years old. Other members of my family continued there.
	I feel a great sadness that, for all the euphoria that surrounded the Lancaster House agreement 22 years ago, no one since then has been able to build the level of trust that would make it possible for Zimbabweans to come together in a common cause for their country.
	To introduce one small cheerful note, I heard from a friend in Zimbabwe that everyone who has the opportunity is following the cricket on television, even if that means that they have to have a new understanding of what is meant by a "duck" or by "bowling a maiden over".
	The noble Earl, Lord Sandwich, mentioned that at the start of the cricket competition, two of Zimbabwe's most talented players bravely took the field wearing black armbands. They have since been subjected to threatening phone calls and more. The death that they wished to record was the death of democracy. For democracy to have meaning, one needs food, the rule of law and education. It appears that all those are in increasingly short supply in Zimbabwe.
	In the debate in your Lordships' House on 19th February, the noble Earl, Lord Sandwich, emphasised the need for education in Africa and mentioned South Africa as the one country that provides universal primary education. That makes it even sadder to contemplate the fact that, 20 years or so ago, under the Smith regime, whatever one may think of its motives and actions, universal primary education was available in Zimbabwe. I have tried to verify the figures for today. The latest UNESCO figures go up only to 1999–2000 and show the figure of 80 per cent. However, I have seen recent figures that speak of a collapse in the number of those receiving education to less than one-third of the age group.
	The attitude of President Mugabe's party to education has a strange consistency. In the days of civil unrest, ZANU did not particularly value those schools; rural primary schools were seen as easy targets for guerrilla fighters, as they represented parts of the structure that they wanted to topple. Now I read that hundreds of teachers in the central high veldt and the eastern highlands have been forced to attend reorientation camps on the suspicion that they might be sympathetic to the opposition party, MDC. One teacher is quoted as saying that for the past three years they had been scared to punish pupils, in case they were reported to the local ZANU-PF.
	It appears that, even today, the only education that counts for President Mugabe's government is one that promotes his political agenda. Is the whole apparatus of a 20th century totalitarian state all that the 21st century has been able to offer such a country?
	Among the many distortions that seem to be on offer is one that has elevated a concept of land hunger into a more serious condition than starvation and death. I have a friend in Harare who has worked for the past 25 years developing crops to enable small farmers to be self-sufficient. The latest developments mean that, with 365 cassava plants and 1,000 potato vines each, they would be able to feed themselves. The major weakness that he reports, which my noble friend Lady Park emphasised, is that for all the trumpeting of land redistribution in Zimbabwe since 1981, the scheme has not given one small farmer ownership of a single hectare. Each hectare, every blade of grass and every brick on brick is owned by the government. That means that officials can bully any settler or farmer and put a friend or relative in their place at any time.
	My friend told the story of a second-form student in the school that his daughter has attended, whose father is a brigadier in the army. She boasted to her friends, "My father has 16 farms, and the next one is for me". Is that not an indication that a power game is going on in the elite simply to see how much each person can grab for himself?
	Unfortunately, actions such as these rob ordinary citizens of their dignity and motivation. That seems in stark contrast to the rosy concept of African socialism to which President Mugabe was once said to aspire. If land redistribution is meant to be meaningful, the best way to restore dignity is for people to know that they have the security of owning their own land and that they can grow enough food to feed their families. With proper security of ownership and a harvest, people can begin to form their own opinions. Without that, it is hard to see how democracy can be restored.

The Earl of Caithness: My Lords, it is now 12 months since the fraudulent elections were held in Zimbabwe, so it is perhaps a good time for us to take note of the situation. I am grateful to my noble friend Lady Park for giving us the opportunity to do so.
	In the past 12 months, despite promises to the contrary and undertakings by President Mbeki to the G8 summit and other forums, not only has the political, economic and humanitarian situation worsened, but the wholesale suppression of democratic activity has been intensified.
	Let us take the past week in Zimbabwe, which has been a normal week in the lifetime of Zimbabweans. Only 10 per cent of the food supply necessary to feed the country has been imported and an unknown number of adults and children have died of hunger and malnutrition. My noble friend Lord Moynihan referred to the cost of a tube of toothpaste. A mother must pay 5,000 Zimbabwean dollars, which is £59, for a small tin of baby food. In one week, 3,000 people have died of AIDS. The inflation rate, which noble Lords have said is well over 200 per cent, is now running at a yearly total of 450 per cent. Twenty thousand Zimbabweans fled the country as economic refugees.
	As the noble Lord, Lord Acton, said, some 35 per cent of the adult population are HIV positive; more than 60 per cent of all women having children are HIV positive. That means that some 7,000 Zimbabweans who are HIV positive are fleeing the country per week. Saddam Hussein might have biological and chemical weapons, but Mr Mugabe continues to export contagion on a grand scale to sub-Saharan Africa, where there is no health system to cope with the diseases that accompany AIDS. Ministers' recent comments about the policy towards Iraq exposes the hypocrisy of this Government. If one takes away the arguments that they have used about chemical and biological weapons, everything that has been said about Saddam Hussein—that he has caused rape, murder and genocide—applies equally to Zimbabwe. The only difference is that Mr Mugabe is professional at it, while Saddam Hussein is a novice. Zimbabwe is like a volcano that covers not only its own citizens but the rest of the area in a deadly, pervasive layer of ash.
	As many noble Lords—including the right reverend Prelate—pointed out, the number of arrests and beatings continues to rise and the Church has been harassed. My noble friend Lady Chalker referred to the Green Bombers. That genie is out of the bottle and there is not the political will to put it back in. The noble Lord, Lord St John of Bletso, mentioned the environment, which no one else has picked up on—the decimation of the rhino and other rare species as a result of Mr Mugabe's policy.
	It has also been an unusual week in Zimbabwe. Despite the Secretary for Foreign Affairs stating, "We do not arrest diplomats, only politicians", a meeting was held by a local branch of the MDC, which was the first for six months. The agenda was read by streetlight because it was too dangerous to have candlelight where they had their meeting. No one was applauded for what they said or their courage in standing up to intimidation, as that too would have brought the unwanted and unwarranted attention of the police and thugs.
	Into this degenerating situation, we should consider the comments of Mr Mbeki, the President of South Africa, and General Obasanjo, the President of Nigeria. They consider that things are looking up in Zimbabwe and there is no reason to continue with Commonwealth sanctions. What planet do they live on? My noble friend Lady Chalker was absolutely right: the two leaders in southern Africa who should know what is going on are those two. As the noble Lord, Lord Hughes, said, it is clear that the Commonwealth is deeply divided. I fear that it is holed below the waterline. There is now one policy for Africa and another for the rest of the Commonwealth. As a result of what those leaders have said—and they are senior figures—I fear that NePAD is not worth the paper on which it is printed. The Commonwealth has failed the first crucial test. If it fails the next test at the forthcoming meeting, the repercussions will be felt for a long time.
	I have disagreed with the noble Lord, Lord St John of Bletso, on Zimbabwe before. He had the courage and grace to come to me and say, "Yes, I was wrong". I hope to goodness that he is right this time, because I take a different view. For the first time, the reports I am receiving from Zimbabwe indicate that people are almost at the end of their tether and that civil war is not far away. The international community is not being seen to do anything to help the situation. As all noble Lords have said, the situation is being exacerbated. I hope that the noble Lord, Lord St John of Bletso, is right that there is a ray of hope. I fear that it is more likely to be a civil war.
	I have not raised any questions for the Minister, simply because she has not answered any of the questions I raised in previous debates and I did not want to bother this time. The Government will wring their hands and tell us how dreadful the situation is, but they will do nothing. We have to find a new path forward. I urge the Government to think again. To those in Zimbabwe who are suffering intimidation and fear which we cannot comprehend, I say only that there are many in Britain who have not turned their back on you. We wish to help, and we long to do more to help if only we were given the chance.

Viscount Goschen: My Lords, my noble friend Lady Park is to be congratulated on securing this important debate. It would be so easy for Zimbabwe to fall below our radar screens at this time of heightened international tension concerning Iraq. Now that media attention concerning the elections and Zimbabwe's subsequent suspension from the Commonwealth has passed, it would perhaps be tempting to see the issue as yesterday's story. Indeed, there are some who talk down the situation in Zimbabwe. For example, President Obasanjo of Nigeria has implied that illegal land settlement was last year's issue and that its consequences belong to last year, not this year. However, we know that that is not so. The situation is desperate and urgent.
	I know that people in Zimbabwe draw great strength from the fact that people in the UK and around the world care about their fate. It is extraordinary that every speaker has expressed not only outrage about events in Zimbabwe but great affection for that country and its people.
	We have heard from very many speakers about the dire economic and agricultural situation in Zimbabwe. The position is not surprising. If productive farmers are chased off their farms and the land is given to Ministers, politicians, generals and the like and left to lie fallow, it is not surprising that, when there is no money to import food, hunger and starvation are the consequence. The tragedy is that the situation is entirely man-made. Zimbabwe was once relatively prosperous for its region and was highly productive. Its agricultural system was the envy of the region. However, the country's well-being has been sold—exchanged for power and wealth for the president and a small clique of ZANU-PF supporters.
	When I was living in Zambia in the early 1990s, I used to travel to Zimbabwe. I was impressed with the country. The roads were well kept. The policemen were neat and polite. The shops contained plenty of goods, although some were in short supply. In Zambia, one could buy orange juice, mealie meal and vegetable oil but little else. The difference was profound. Now, Zimbabwean farmers are leaving their productive farms and loyal workers and starting again in Zambia. That highlights the real change in the region. It is due not to natural disaster but to the tyranny of one man and his small group of supporters.
	Professor Tony Hawkins, director of the graduate school of management at the University of Zimbabwe, said:
	"At independence in 1980, Zimbabwe had a sound physical infrastructure, a skilled, educated population and strong institutions. Many of the skills have since emigrated, the infrastructure is decaying visibly, and its institutions—the public service, parastatals, the judiciary, the health and education delivery systems and the police—are also deteriorating".
	That is putting it very mildly indeed. In the 2002 Global Competitiveness Report, Zimbabwe is ranked 79th of 80 countries. It has a ranking of 75th of 80 for judicial independence, 77th for property rights and 75th for government favouritism. I would not be surprised if Zimbabwe has plunged further in those terrible rankings.
	The problem is that the crisis is contagious. Zimbabwe represents a key test for the credibility of acceptance in the region that good governance is a prerequisite for economic growth and for support of development policies by western countries. If the test is flunked, the outlook for Africa is poor. Investors are looking south to see whether the rule of law and respect for property rights are considered serious issues. Development aid can be switched at the touch of a ministerial button. Investment capital, however, is extremely flighty and mobile. It will not go into a region where there are those threats. If the issue is shirked by political leaders in the region, the inference must be that rule by political thuggery and theft of assets for redistribution to the party faithful is acceptable or is at least not unacceptable.
	The political situation, in terms of the will of the leaders of the surrounding countries to ensure that a solution is found quickly, does not look encouraging. Given that the situation in Zimbabwe continues to deteriorate, the recent moves about which we have heard by President Mbeki and President Obasanjo, calling for the lifting of Zimbabwe's suspension from the Commonwealth, have been interpreted as tolerance of the regime's disregard for the rule of law.
	I listened carefully to the noble Lord, Lord St John of Bletso. Like my noble friend Lord Caithness, I sincerely hope that he is right. I certainly do not know what is going on behind the scenes or what pressure President Mbeki is applying. However, I hope that the Minister does know and that she will be able to tell us whether any progress is being made. If none is being made, not only will investment retreat from the region—a profound and long-lasting consequence—but the country will continue to be very short of food. Its population will continue to be oppressed by force. If a solution is not found urgently, I fear that there will be extreme consequences, as my noble friend Lord Caithness has outlined.
	We are repeatedly told that this is an African problem which needs African solutions. Quite so. But that does not mean a blank cheque for the United Kingdom to stand by and watch the tragedy unfold. I believe that we owe it to Zimbabweans to take the risk of being branded by some governments as "interfering". Either we believe in the ideals behind the new African partnership and are prepared to demonstrate our seriousness or we do not. The question now is not about wider economic developments in the region. It is about a very urgent situation in Zimbabwe.

Lord Astor of Hever: My Lords, I congratulate my noble friend Lady Park on securing this important debate and on her powerful speech.
	I am disappointed that the debate takes place against a background of continuing deterioration in Zimbabwe. Despite the excesses of electoral fraud, intimidation of the judiciary and a disastrously handled land reform programme, there are those—including President Mbeki of South Africa—who refuse to acknowledge that things are getting worse there and who will call on us to adopt quiet diplomacy towards the regime. In his 20-odd years of power, I have not noticed Mugabe opting for the quiet approach. The suggestion that, in the midst of a grave famine, we should moderate our condemnation of food aid rationing as a political tool; the suggestion that we should turn a blind eye to torture by his security forces; the suggestion that we should not speak out against murder and rape—all for fear of upsetting Mugabe's sensibilities—are patently inexcusable.
	I believe that the people of Zimbabwe, and the citizens of the wider Commonwealth, have been badly let down by Presidents Obasanjo and Mbeki. Their position that the Zimbabwean Government have mended their ways and deserve readmission to the councils of the Commonwealth is untenable; I deplore it. While they call for quiet diplomacy, those leading the opposition from within Zimbabwe are calling for loud diplomacy. Brian Kagoro, the national co-ordinator of Crisis in Zimbabwe, looking for support from some of the newer African governments, said:
	"What you need in Africa are voices of dissent. There is a need to find new players on the African continent who are not partisan and want a real solution in Zimbabwe. South Africa's policy is a mixture of quiet diplomacy on human rights issues, when it should be loud, and loud partisanship in support of Zanu-PF, when it should be quiet".
	Can I encourage Her Majesty's Government to redouble their efforts to support and bolster those elements that are opposing the tyranny of ZANU-PF rule? In the search for a solution to Zimbabwe's crisis, one of the great missed opportunities has been the failure of the leaders of SADC and NePAD to engage constructively with the opposition. Rather than constructing what appears to be a coalition of complicity with ZANU-PF, those leaders could have helped raise the stature and morale of other democratic elements within Zimbabwe.
	Sadly, the coalition of complicity is not limited to Africa. Within the past month there has been cynical manoeuvring among our European partners as they have sought to undermine the measures isolating the ZANU-PF regime. Disregard for the spirit, if not the letter, of the EU travel ban discredits the French Government; apparent preparedness to participate in "behind the scenes" collusion with the French gravely discredits Her Majesty's Government. Only after my honourable friend's questions in another place brought the issue into the public domain did there seem to be any attempt to stand up for what ought to have been a matter of principle from the outset.
	Ministers tell us that allowing President Chirac to wine and dine Mugabe in Paris—and, as my noble friend Lord Moynihan pointed out, to allow his wife to go shopping—was a price worth paying for the renewal of EU sanctions. They say that, otherwise, the travel ban would have been fatally undermined. Ministers proudly claim to have achieved a roll-over of the sanctions.
	In fact, the EU travel ban has been seriously weakened. Article 3 of the Common Position adopted last year has now been amended; a member state wishing to grant exemptions for banned individuals to attend meetings of international bodies no longer needs to apply for the agreement of other member states.
	Furthermore, there is now provision for member states to grant exemptions under a category simply of "attending intergovernmental meetings". Most tellingly, with this new provision as well as for existing provisions, our previous right of veto has been removed. The relevant clause used to read:
	"A Member State wishing to grant exemptions . . . shall notify the Council in writing. The exemption will be deemed to be granted unless one or more of the Council Members raises an objection in writing within 48 hours of receiving notification of the proposed exemption".
	This has now been watered down by the added provision:
	"In the event that one or more of the Council members raises an objection, the Council, acting by qualified majority, may decide to grant the proposed exception".
	We can probably all think of at least one member state that might feel moved to exploit those new provisions to the full. I suggest that our response to the independent and often self-serving agendas of some of our EU and Commonwealth partners should be to pursue our own independent and principled stand against tyranny and repression.
	Our participation in EU sanctions and the Common Position adopted by the Council of Ministers should not preclude Her Majesty's Government from taking action in concert with those of our Commonwealth partners such as New Zealand and Australia who are adopting an admirably robust and determined stance against Mugabe's human rights abuse.

Lord Thomson of Monifieth: My Lords, I deputise for my noble friend Lord Shutt who has unfortunately had an accident. I know that everyone will wish him a safe and speedy recovery.
	Like everyone who has spoken, I am indebted to the noble Baroness, Lady Park, for once again initiating a moving but deeply depressing debate on the situation in Zimbabwe. It inevitably takes me back to UDI when I was Britain's last Commonwealth Secretary and negotiated with Ian Smith for peaceful progress to majority rule and independence. At that time I shared with Robert Mugabe the humiliating experience of conducting my discussions with him while he was in detention without trial. That left a scar on my memory that I have not forgotten. Stanley Baldwin once complained in a different context of the problems of power without responsibility. I found as Commonwealth Secretary in those far off days that it was a painful experience to have responsibility without power.
	Still today we reap a bitter harvest from Ian Smith's UDI. Unlike other African Commonwealth leaders such as Jomo Kenyatta, or, for that matter, Hastings Banda, who repaid imprisonment with magnanimity of spirit towards their former rulers and captors, Robert Mugabe, regrettably, has repaid his experience with tyranny towards his black and white citizens alike. We have heard many noble Lords recite a catalogue of examples of that tyranny, for instance, legislation to clamp down on non-governmental organisations bravely doing a decent job as human rights defenders, fresh legislative curbs on the press, arrests of journalists and expulsions of foreign journalists, gross intimidation and violence towards political opponents in the MDV in the two by-elections that are taking place.
	What can we do? My noble friend Lady Williams has asked me to raise one matter where we have both responsibility and the power to fulfil it. I refer to the question of the deportation of asylum seekers back to Zimbabwe. Members of the MDC have in the past gone missing on arrival at Harare airport and there have been many stories of torture and other forms of harm.
	On 25th February, the noble Lord, Lord Filkin, in a Written Answer said:
	"The temporary suspension of the removal of failed asylum seekers to Zimbabwe remains under review".—[Official Report, 25/2/03; col. WA 17.]
	When the Minister replies, will she clarify the situation? Will she give a clear commitment that steps will be taken to ensure that Zimbabweans who have campaigned for democracy in their own country at risk to their lives will not be sent back to risk persecution and torture?
	Back in November last year the Home Secretary's decision was announced to introduce a visa regime for Zimbabweans coming to the UK. The Home Secretary was quoted in The Times of 8th November 2002 as saying that the visa regime is,
	"to deal with what is very significant abuse of our immigration controls by Zimbabwean nationals".
	We are dealing with a very special situation here, one in which we do have a power to act and a responsibility. I repeat that failed asylum seekers may be in great danger if returned to Zimbabwe. I hope that I can have some reassurance from the Minister on that matter.
	What else can we do? There was consensus in the speeches made about the sheer frightening horror of the food situation. The noble Lord, Lord Acton, mentioned that 10 million people would be at risk of starvation by Christmas if something was not done. What is the best framework for dealing with the problem? Some critical remarks have been made about the Commonwealth as a framework. I can say from personal experience that the damage that the Rhodesian UDI did to the potential role of the Commonwealth in international affairs is a regret to me to this day. We still suffer from that damage.
	I do not underestimate the risks to the Commonwealth of the present situation, with the split in the troika and the division as to whether sanctions should be maintained. I hope that the Minister will give clear guidance that the sanctions regime will be substantially and vigorously maintained during the coming year. Equally, I do not underestimate the rather mysterious ways in which the Commonwealth can operate, its wonders to perform. For instance, the Commonwealth might well be able to help to bring about the quiet and peaceful retirement of President Mugabe from affairs, which would be a great blessing to us all.
	Nevertheless, the wider framework of the United Nations is probably the framework that will be most effective, as the noble Baroness, Lady Park, said. That would be especially likely if there could be a useful and constructive alliance between the United States and South Africa. The United States could do itself a bit of good in the United Nations in the months immediately ahead if it were to take a vigorous part in leading a humanitarian campaign of an effective nature on food and health generally in Zimbabwe. From that, other benefits in human rights and political reconciliation might well follow.
	We must not despair. I and other noble Lords, such as the noble Lord, Lord Hughes of Woodside, went to the extraordinary memorial service for Sir Garfield Todd in St Martin-in-the-Fields. There was a huge congregation. That did something to lift up my heart and restore my faith in continuing to fight the good fight in terms of finding solutions for the Zimbabwean problem. Mention has been made of the very brave cricketers. Many good people are trying to deal with the problem. I do not want to discredit the Commonwealth, but I hope that through the United Nations there can be a major effort in the months ahead to deal with the situation in Zimbabwe.

Lord Howell of Guildford: My Lords, my noble friend Lady Park opened this short debate with a superb speech. She reminded us not only of her knowledge of the subject, but that she is one of the most redoubtable fighters in either House for all the people of Zimbabwe—not for any group, but for all of them.
	If the newspapers are accurate, which they often are not, I gather that the Minister has just returned from Guinea, where I hope that her mission was successful. I cannot imagine why she wished to go there now, but I am sure that she had a very useful and constructive time. She has most certainly done her bit and fought strenuously on the affairs that we are discussing; I do not deny that for a moment. Nevertheless, it would be idle to pretend that people, and indeed the Opposition, are happy with the policy of quiet diplomacy, as it is being called. The noble Earl, Lord Sandwich, rightly drew attention to that unhappiness.
	It may be true, as we have been told all along, that while we make huge efforts on the humanitarian side—we are trying to meet the hideous starvation and other horrors and deprivations of the region—we can be sure that we can do nothing else to change the political context of what is in all essentials a fascist state; nothing can be done about that. However, if, as legal experts in your Lordships' House tell us, genocide is a reason for intervention, Robert Mugabe comes very near the edge with his practices; they are on the verge of being defined as genocide. We are left disappointed; the word "disappointing" has been used again and again by noble Lords this evening about what has and has not been achieved.
	Eighteen months ago, the Prime Minister, in fine rhetorical flow, said that his foreign policy was,
	"a fight for justice, a fight to bring economic and social freedom to the starving, the wretched, the dispossessed, the ignorant, those living in wanton squalor, from the deserts of Africa to the slums of Gaza to the mountain ranges of Afghanistan—they are our cause".
	While those words may have taken wing and landed somewhere, they certainly overflew Zimbabwe. The cause somehow failed to ignite there and we have not been able to do what many of us feel in our hearts we should have done; we should have done more to prevent the present tragedy—the inevitable, predicted tragedy that is now before us.
	Let us assume for a moment that we cannot take any more action in Africa; apparently, we can in other parts of the world but intervention in Zimbabwe is ruled out by law and various other constraints. What, then, can we do here? What, as my noble friend Lady Park, asked, do we have the power to do? How can we be positive and follow the lead given by my noble friend Lady Chalker, whose experience in these matters is unequalled? She said that we must somehow be positive in our approach to this appalling tragedy and this catalogue of horrors.
	Back in November—four months ago almost to the day—we had a debate in your Lordships' House about targeted sanctions in Zimbabwe. I offered from this Dispatch Box a "to do" list of seven things that might be done here in London—from behind ministerial desks—which might help to reinforce our efforts to halt the slide to tragedy. I suggested that we should implement the recommendations of the UN panel on illegal activities in the Democratic Republic of Congo, which raised all sorts of points about the activities of the Zimbabwean armed forces and many prominent Zimbabwean people. I asked why we could not target those individuals.
	I suggested in that debate that we should extend sanctions to spouses. I suggested that we should eliminate some of the travel loopholes—this was before Mr Mugabe went to Paris—and that if the criterion was to allow movement only where treaties oblige countries to let people in, we should seek to ensure that those treaties were rigorously adhered to and that there were no wriggles round them. I suggested that we should resist deals such as that which, subsequent to that debate, allowed Mugabe and his wife into Paris, as my noble friend Lord Astor reminded us. That let her go on her spending spree while children were dying of starvation in Zimbabwe. I cannot think of a sicker contrast.
	I read in the papers this morning—they are usually inaccurate—that Mr Mugabe has the KCB. Does he in fact have it? International Who's Who makes no mention of it. If he has, could the Minister please urge those who deal with such things that he be stripped of it as soon as possible?
	I recommended in that debate that, over and above what we were already doing, we freeze all assets of companies that were bankrolling Mugabe; many of them were mentioned in the UN report. I also said that we should publish a dossier of suspected torturers and that we should extend the embargoed goods list because it appears that Mr Mugabe has an endless supply of black Mercedes cars. Perhaps I have missed something, but in the four months since then, I have heard not a squeak. I am not aware that any of those things have been done. I have heard no subsequent reports from the UN panel with its devastating exposé.
	My noble friend Lady Park has added more items to the list. She has urged that, quite rightly, we should protect expatriates' pensions, which are being unfairly decimated by official rates. Several noble Lords, including the noble Lord, Lord Thomson of Monifieth, have rightly reminded us about asylum seekers. It is appalling that we are sending back people to their death or imprisonment in Zimbabwe.
	As I previously suggested, we should insist and ensure that when the year of exclusion from the ministerial councils to the Commonwealth comes to an end, that exclusion continues. I should like very much to know—we all would—what the Government are doing with potential friends in Africa to ensure that.
	Since November, we have had good news from Africa. The National Rainbow Coalition has taken over in Kenya. It has a much more democratic approach, like the Government of Senegal. Other countries might be beginning to question the solid front of support for the evils of Zimbabwe and to challenge the bloc view that the African union has decided that nothing should be done.
	Have we have brought in the Americans, as my noble friend Lady Park suggested? They have been very robust indeed. There are American Congressmen and officials who are extremely eager to work with the British towards a much more forceful policy of putting pressure on Mugabe. We should never underestimate the role of the Americans in southern Africa. It goes right back to the days of Chester Bowles. The noble Lord, Lord Thomson, will remember that he did much did good work and laid many foundations for a better Africa than the one we see in some areas today.
	I add yet another suggestion for a policy improvement. We must vigorously support broadcasting by the BBC and other channels into south and central Africa of the truth about what is really going on, with all the details and the kind of horrors your Lordships have rightly exposed and set out in the debate.
	I agree with the hope that Mugabe cannot last much longer. I hope that the noble Lord, Lord St John of Bletso, is right about that issue. It is only a hope and nothing more. Nevertheless, if we deploy the kind of policies that we have suggested today and carry forward a more vigorous approach—the kind that my noble friend Lord Moynihan outlined—perhaps we can accelerate the process. I put the situation no higher than that. At least we must make sure that when men and women look back on this very dark and tragic period for Zimbabwe, they are left in no doubt that we did everything within our power to encourage brave Zimbabweans to send Mugabe on his way.

Baroness Amos: My Lords, I thank the noble Baroness, Lady Park, for introducing today's debate on Zimbabwe. The noble Lord, Lord Howell, mentioned that I have just returned from Guinea. I have in fact been in Guinea, Angola and Cameroon. I leave noble Lords to speculate about the reasons for my visits to those three countries.
	I start by setting out the Government's policy on Zimbabwe. Our policy objectives focus on the importance of securing the restoration of a stable and prosperous Zimbabwe underpinned by democracy and good governance, including respect for human rights and the rule of law.
	Today's debate has focused on three key areas. They are Zimbabwe's economic decline, the political situation, including the increase in human rights abuses and harassment and intimidation of the opposition MDC, and the humanitarian crisis, including the disastrous fast-track land reform programme.
	I turn to the economy. Zimbabwe's economy has continued to decline and is now in crisis. It contracted by 12 per cent in 2002, according to the estimates of the Reserve Bank of Zimbabwe. It is now the fastest shrinking economy in the world. Inflation is over 200 per cent, unemployment is over 70 per cent and its currency has continued to plummet in value. There is little food, fuel or foreign exchange. That decline is largely due to poor economic policies, which have undermined macroeconomic stability and destroyed business confidence.
	Despite advice from international financial institutions such as the World Bank and the International Monetary Fund, ZANU-PF has stuck to a policy of price controls, refusing to raise interest rates to combat inflation. The recent move effectively to devalue the Zimbabwean currency by 93 per cent for those changing foreign currency is too little, too late and is unlikely to make much impact on foreign exchange availability. But it is at least some recognition that the problem is of their own making.
	As the noble Lord, Lord Blaker, made clear, the economic crisis in Zimbabwe is having an impact on neighbouring economies. Negative perceptions have deterred foreign investment and tourism to the region, which has contributed to currency volatility. Countries such as Zambia have suffered damage to local production and customs revenues from the influx of cheap Zimbabwean goods, mounting bad Zimbabwean debts, and an increase in largely unskilled Zimbabwean migrants, when their own unemployment levels are high.
	I turn to the political situation. The country remains polarised. There seems little immediate prospect of dialogue between the ruling ZANU-PF and the opposition Movement for Democratic Change, despite the efforts of South Africa and Nigeria last year. As has been mentioned, the MDC President, Morgan Tsvangirai, is on trial for treason, along with the party's general secretary and shadow agriculture minister. The very fact of the trial is hardly conducive to political reconciliation.
	Political life in Zimbabwe continues to be marred by violence. Much of that is perpetrated by the ruling party and directed against the opposition and civil society. This year alone has seen the arrest of eight MPs and four senior officials, including the MDC Mayor of Harare. Some of those arrested have been tortured while in police custody—including the MDC MP, Job Sikhala; an allegation substantiated by government doctors. There has been a wave of police arrests in Harare and Bulawayo in the last few days.
	The right reverend Prelate the Bishop of Rochester mentioned that those arrested included clergymen from all denominations. MDC activists and cricket spectators who dared to unfurl anti-Mugabe posters at Zimbabwe's recent match with the Netherlands in Bulawayo were also arrested. The right reverend Prelate is right; they deserve our support. I agree with him that the role of non-governmental organisations is crucial.
	Attacks on the judiciary have also continued unabated. On 17th February a sitting high court judge was arrested in his chambers and charged with corruption and obstructing the course of justice.
	I turn to the humanitarian situation. About 7.2 million Zimbabweans—more than half the population—require food aid; and 35 per cent of the adult population is infected with the HIV virus. My noble friend Lord Acton focused on food shortages and the noble Earl, Lord Sandwich, spoke of what he called the "food insecure". The food shortages that we now witness are primarily the result not of bad weather but of bad governance and bad economic policy. Kofi Annan made that clear in his New Year statement on 14th January, when he said that the tragic situation in Zimbabwe has been caused,
	"partly by the forces of nature, and partly by mismanagement".
	We are well aware that ZANU-PF has been manipulating food distribution. There have been numerous reports of the Grain Marketing Board, the state monopoly, withholding food from those who do not support the ruling party. There were food riots in Harare and Bulawayo in early January. Those were led not by the opposition MDC but by "war veterans" enraged at the Grain Marketing Board's policies.
	We have condemned ZANU-PF for its manipulation of food for political advantage. Unfortunately, we have no control over the food that it buys itself. However, I reassure noble Lords, as I have done many times, about UK food aid. That is distributed through the United Nations World Food Programme very differently. The World Food Programme is careful to ensure that international food aid is distributed only through independent NGOs outside the control of the Government of Zimbabwe. The process is carefully monitored to avoid abuse. I assure the noble Earl, Lord Sandwich, that we are in touch with the World Food Programme about all allegations of diversion of food aid.
	The noble Duke, the Duke of Montrose, mentioned the land reform process. There is no doubt that the humanitarian crisis has been exacerbated by ZANU-PF's "fast track" programme of land redistribution as much of the requisitioned land lies fallow. James Morris, the head of the World Food Programme and the UN Secretary-General's special envoy on the humanitarian crisis, said after his visit to Zimbabwe in January:
	"Zimbabwe is almost beyond comprehension. This scheme (land reform), along with restrictions on private sector food marketing and a monopoly on food imports . . . is turning a drought that might have been managed into a humanitarian nightmare".
	That is leaving aside the impact on the 350,000 farm workers who have now been displaced, with a knock-on impact to their families. We are talking about some 1 million people.
	Even within ZANU-PF there has been considerable criticism of how land distribution has been carried out, as shown, for example, in speeches at the party's conference last December. More recently, press reports here and in South Africa state that an audit prepared by members of the Zimbabwe Government alleged that key figures in the leadership have been involved in land seizures that break the regime's limits on the size of farms and its "one man, one farm" policy.
	So what action have we taken? I have listened carefully to noble Lords in this and the many other debates on the issue in this House. The issues that they raised and the action that they suggested we take related to work already in hand. We clearly share the same analysis. I share the frustration that I feel around the House by noble Lords that our policies are not delivering a difference more quickly. The noble Lord, Lord St John of Bletso, spoke of the process taking a long time to yield results. That is true. Zimbabwe is a sovereign nation. There is a limit to what we can do with a regime that is determined to ruin its own country and its own people.
	We have worked with our colleagues in the European Union, the Commonwealth, the US and elsewhere to focus the attention of the world community on what is happening in Zimbabwe. That has resulted in a rollover of EU sanctions—the travel ban, the assets freeze and the arms embargo. The noble Baroness, Lady Park, asked me how much had so far been frozen. The amount now stands at just over £500,000, which is what I think I reported to the House towards the end of last year. Any future waiver of the EU travel ban will need to be agreed by a qualified majority of EU member states. That is a strengthening, not a weakening as stated by the noble Lord, Lord Astor of Hever. I agree with noble Lords that France's invitation to Zimbabwe to attend the France/Africa Summit in Paris was deeply disappointing. It is not clear to me from the readouts that I have had from the meeting that a clear message was given to Mugabe about the ruinous policies followed by ZANU-PF.
	The noble Lords, Lord Thomson of Monifieth and Lord Blaker, the noble Viscount, Lord Goschen, the right reverend Prelate the Bishop of Rochester and other noble Lords raised the question of the Commonwealth and the work that we are doing through it. I remind noble Lords that my right honourable friend the Prime Minister was at the forefront of calls for Zimbabwe's suspension from the Commonwealth at the Commonwealth Heads of Government Meeting last year. I remind noble Lords that it was not an easy thing to achieve. The action that we have taken and the work that we have undertaken over many months to secure international agreement to what we wanted to do with respect to Zimbabwe have delivered some results. We will continue to work closely with our Commonwealth partners on Zimbabwe. The Commonwealth Secretary-General is reviewing developments since Zimbabwe's suspension from the Commonwealth's councils on 18th March last year. His report is due to be issued shortly.
	By every measure—political, humanitarian and economic—the situation in Zimbabwe has deteriorated this year. I agree with the noble Lord, Lord Blaker, that the Harare principles apply to all members of the Commonwealth. We see no grounds for lifting Zimbabwe's suspension from the councils. The noble Lord asked me to confirm that, if no agreement were reached by the troika, the suspension would continue. I cannot confirm that; we must wait for the report from the Commonwealth Secretary-General and for the troika to deliver a verdict. My personal view is that it should.
	I agree with the noble Baroness, Lady Chalker of Wallasey, that we must share information. It is clear that our colleagues not only in Africa but in other parts of the Commonwealth have little understanding of what goes on in Zimbabwe. On a superficial level, things appear to work and to be much better in Zimbabwe than in some other parts of the world, where the roads are not as good or the telephones do not work. However, such things give a false impression of what goes on. We have shared information on land reform, and we worked with the Commonwealth to share the UN panel report, as suggested by the noble Baroness, Lady Park of Monmouth. We will continue to share information.
	We are in ongoing dialogue with countries in Africa, particularly in southern Africa, about the problems facing Zimbabwe and the region. We have stressed that failure to address Zimbabwe's problems has the potential to undermine NePAD and that it is a brake on much-needed investment in the region. I thank my noble friend Lord Hughes of Woodside not only for his kind remarks but particularly for his recognition of the need to support our diplomatic and other efforts.
	Our political dialogue continues. The Prime Minister met South Africa's President Mbeki at Chequers on 1st February. Zimbabwe was high on their agenda, and the Prime Minister shared our understanding of the considerable problems facing the country. I met Angola's President dos Santos on 27th February. Angola is the current chair of SADC. We had a useful exchange of ideas on Zimbabwe.
	The noble Lord, Lord Blaker, asked whether there was peer pressure behind the scenes. My response is "Yes". Some of our African colleagues are as frustrated as we are, because that pressure is not delivering results.
	The noble Baroness, Lady Park of Monmouth, mentioned the need to bring the UN on board. We work with the UN in several ways. We work with the World Food Programme, and noble Lords will recall that we worked with the United Nations Development Programme on land reform. It was the UNDP that said last year that the land reform process was unsustainable. Last year, the UK Government took a resolution on Zimbabwe to the Commission on Human Rights. The noble Baroness also referred to the speech made by the UN Secretary-General, from which I quoted. We will continue to work through the UN machinery.
	The noble Lord, Lord St John of Bletso, spoke about the initiative taken by the Archbishop of Cape Town. The archbishop has seen President Mugabe and is considering an initiative under Church auspices. He is undertaking wider consultations with other stakeholders in civil society in Zimbabwe. Our understanding is that he will begin such consultations when he returns to Zimbabwe on 12th March. It is important that all stakeholder views are considered, as well as the broad scope of the problem, including the humanitarian, political and economic aspects. Of course, there are also the broad problems of governance, not just land. I repeat that they have implications not just for Zimbabwe but for its regional neighbours.
	I turn now to human rights. The European Union issued a declaration on Zimbabwe on 19th February. It expressed the EU's concern at the increasing incidence of arrest, inhuman treatment and torture of members of the opposition and of civil society. It called on the Government of Zimbabwe to respect human rights and to end their harassment and violence. Despite the international support for our resolution to the Commission on Human Rights last year, the commission was unable to vote on it due to a blocking campaign by some African states. We think that the deteriorating human rights situation deserves the continued attention of the Commission on Human Rights.
	The UK Government have led the international response to the humanitarian crisis. We started feeding programmes in September 2001. That was even before the government of Zimbabwe acknowledged that there was a problem. We are the largest European bilateral aid donor, the second overall after the United States. We have contributed £51 million to the humanitarian programmes in Zimbabwe since September 2001. We also have a direct bilateral feeding programme which is providing a meal a day for 1.5 million Zimbabweans. These are mainly children, pregnant mothers, the elderly, unemployed farm workers and their families.
	Moreover, the two countries which ZANU-PF consistently single out for criticism—the US and the UK—are leading the way in providing help for the people of Zimbabwe, and in feeding hungry Zimbabweans. The UK has also helped with essential health care and treatment for malnutrition in infants. DfID maintains a substantial programme to tackle HIV/AIDS, an issue raised by some noble Lords. We are spending £26 million on HIV/AIDS prevention programmes over five years.
	Perhaps I may now speak briefly about the G8 and NePAD. I believe that there is a fundamental misunderstanding in this House of the nature of the Government's policy with respect to the G8 Africa action plan. The Government have not accepted that the situation in Zimbabwe is an African issue to be settled by Africans. In that, I take issue with the noble Baroness, Lady Park, although I agree with much of what she said. We have made absolutely clear that this is an issue for the whole international community. I say that also to the noble Lord, Lord Moynihan. That is why the European Union, the Commonwealth, the United States and others are engaged and that is why we are talking to leaders in Africa—not just through the NePAD process, but also through our bilateral contacts and through regional institutions, such as SADC.
	In respect of NePAD, I repeat what I have said many times in this House. G8 countries were interested in forging a partnership with those African leaders with a commitment to reform. At the heart of the G8 Africa action plan is the notion of enhanced partnership. In response to the noble Lord, Lord Blaker, our aid is clearly linked to reform. What African leaders agreed last year was an inclusive process. They hope to persuade countries that are not interested in reform of the benefits through joining NePAD. G8 said that we are interested in working in enhanced partnership with the reformers.
	The noble Baroness, Lady Park, also mentioned the NePAD peer review mechanism. It is due to start in April; 14 countries have volunteered; and it will cover economic and political governance. The papers that I have seen are extremely comprehensive.
	My time is up, but if your Lordships will forgive me, I should like to refer to three further issues raised in debate. The noble Baroness, Lady Park, mentioned financial support for those coming to the United Kingdom. UK citizens returning to this country may be eligible for certain benefits, subject to normal conditions of entitlement. Personal circumstances can be taken into consideration.
	The noble Lord, Lord Thomson, raised asylum. On 15th January 2001, the Home Secretary suspended removals of failed asylum seekers from Zimbabwe after the March presidential election. Removals are still on hold. We shall continue to keep the policy under review.
	I really must take issue with the noble Earl, Lord Caithness, and the comparisons he made between Iraq and Zimbabwe. The noble Earl is ill-informed. Saddam Hussein invaded a neighbouring country. He has used chemical and biological weapons on his own people. For more than 12 years he has flouted the will of the UN and of the UN Security Council. We are all agreed that there are human rights violations in Zimbabwe, but if we are to make a comparison, we need to do so where we are comparing like with like; otherwise the comparisons are meaningless.
	I also take issue with the noble Earl's comment that I have failed to answer his questions. I have answered his questions in this Chamber and I have answered Questions for Written Answer. I have also done the noble Earl the courtesy of listening to his concerns about these issues. The noble Earl may not have liked my answers, but I have certainly given them.
	In conclusion, as the noble Lord, Lord Thomson, says, the situation in Zimbabwe is deeply depressing. We will continue to work for a Zimbabwe which is stable, prosperous and democratic—

Lord Howell of Guildford: My Lords, as the noble Baroness is coming to the end of her speech and there is still a little time, will she confirm whether, as reported in this morning's newspapers, Robert Mugabe is a Knight Commander of the Order Bath? And is she really going to say nothing about the UN panel and all its revelations?

Baroness Amos: My Lords, I am happy to pick up on those points. Yes, Robert Mugabe does have that honour; he was awarded it in 1994. The noble Lord, Lord Howell, asked a number of questions with respect to issues he says he has raised in this House. The activities of the UN panel have been extended for six months because there was a need for further clarification of the issues in its report. Before we are able to take the allegations further, we need more information.
	The noble Lord, Lord Howell, asked about extending the sanctions to spouses. The noble Lord will know of the debate and discussion within the EU in terms of the roll-over of our current sanctions. Given his experience, he will understand why it has not been possible to extend the sanctions to spouses. The same applies to travel loopholes and assets. Furthermore, pensions are the responsibility of the Government of Zimbabwe. I have answered the question on asylum.
	In conclusion, links with the people of Zimbabwe remain strong. That is clear from the nature of the debate in the House today. We will continue to do all we can to work with them to produce the kind of Zimbabwe we know that they want.

Baroness Park of Monmouth: My Lords, it would be invidious to single out any of the admirable speeches we have heard throughout the debate. I am deeply grateful to all noble Lords who have attended. I extend special thanks to my noble friend Lady Chalker. I am particularly pleased that she was able to join the debate. I was also interested to hear the contribution of the noble Lord, Lord Thomson of Monifieth. I thank everyone most warmly, especially the Minister whose knowledge of the subject I deeply respect. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Maximum Number of Judges Order 2003

Lord Bassam of Brighton: rose to move, That the draft order laid before the House on 6th February be approved [10th Report from the Joint Committee].

Lord Bassam of Brighton: My Lords, this order is made under Section 4(5) of the Supreme Court Act 1981. It raises the statutory ceiling for High Court judges from 106 to 108. This ceiling was last increased from 98 to 106 by the Maximum Number of Judges Order 1999 to meet the anticipated increases in workload following the implementation of the Human Rights Act.
	I want to stress that the numbers in post will be increased only if and when the need arises. Putting the statutory instrument in place now will enable the Lord Chancellor to respond almost immediately to a sudden influx of work in high priority areas.
	Noble Lords will be aware that the High Court handles a broad range of cases in areas such as crime, family, social exclusion and asylum. It is not always possible accurately to predict patterns in workload. The High Court is already at its full complement and so the power to make the two additional appointments is necessary in order for the court to be able to respond quickly to any increases in workload in any of these areas.
	This includes work in the Crown Court. In 1998, High Court judges sat for 3,250 days in the Crown Court; in 2001, they sat for 3,486 days. The Government are committed to tackling crime and this may result in an increase in the amount of work on criminal cases in which High Court judges are involved. The involvement of High Court judges is also required for many high profile inquiries and for chairing or participating in tribunals such as the Employment Appeals Tribunal and parole boards. The nature and amount of this work is harder to predict, and the flexibility that the order would create is necessary again to be able to respond to any changes in workload in these areas.
	The Lord Chancellor approved the authorisation of three new deputy High Court judges on 31st December 2002. However, part-time appointments will not provide the long-term flexibility afforded by an increase in the complement. The Lord Chancellor believes that increasing the capacity of the court with two further judges will provide the flexibility needed to make additional appointments if they are required.
	In view of the facts and circumstances I have outlined, I commend the order to the House. I beg to move.
	Moved, That the draft order laid before the House on 6th February be approved [10th report from the Joint Committee].—(Lord Bassam of Brighton.)

Baroness Seccombe: My Lords, I should declare an interest as my brother is a retired High Court judge. I was brought up on the maxim that justice delayed is justice denied. If the order helps to alleviate that problem, we should go along with it.
	I wish to ask the Minister two questions. First, I am intrigued by the order's financial effect. High Court judges are, quite rightly, highly paid. However, the Explanatory Memorandum states that,
	"there are no additional costs to the public or the exchequer arising from the instrument".
	I should be grateful if the Minister could explain how that is calculated and whether there will be any additional costs in succeeding years.
	Secondly, does the Minister expect to come back to the House in the near future with a request for a further increase in the number of judges to reflect the rise in appeals and judicial reviews flowing from the provisions of the Nationality, Immigration and Asylum Act 2002?

Lord Goodhart: My Lords, we on these Benches have no objection whatever to the proposal to increase the number of judges. However, I, too, should like to ask a couple of questions.
	First, the previous increase in 1999, from 98 to 106, was made in expectation of a greatly increased workload resulting from the Human Rights Act. In fact, the increase in the workload has been substantially less than expected because the number of cases in which bad human rights points have been taken is very small. Whereas in some other countries, such as Canada, there was a sharp increase following the introduction of equivalent legislation, that has not happened here. So the increase in 1999 should have provided some slack which can be taken up.
	Secondly, the Minister referred to criminal cases and high profile inquiries. It is not obvious why more cases in the Crown Court should be tried by High Court judges as opposed to Crown Court judges than has been the case in the past. I wonder whether the Government are being entirely frank. Is it not the case that this increase is being made largely as a result of the increased burden from immigration cases? If so, that is nothing to conceal—indeed, it is welcome. Obviously, there need to be sufficient people on the Bench to deal in good time with cases that arise. If it is the case that there has already been a substantial increase in the amount of work resulting from immigration and asylum seekers, this is not simply, as the noble Baroness, Lady Seccombe, said, a question of looking to the future. It means that the increase is largely caused by those circumstances.

Lord Bassam of Brighton: My Lords, I am grateful to the noble Baroness and to the noble Lord for their support for the order and also for their questions. I shall be entirely frank with your Lordships' House. Of course we are increasing the number of judges because of the generalised increase in workload, but I would be disingenuous if I did not make it plain that there has been a large increase of work as a direct result of increases in asylum activity.
	To put the matter in context, in 2002 asylum-related judicial review applications amounted to 59 per cent of all civil judicial review applications, making it the single largest category of administrative court work. That makes it plain that there has been a significant increase. Of the 5,578 civil judicial review applications received in 2002, some 3,308 were asylum-related and the administrative court received, on average, 276 such cases per month. That is one of the key pressures which has led to our belief that the flexibility that the order will give us is justified so that we can be ahead of the game in the future.
	The noble Baroness, Lady Seccombe, asked about cost. My understanding is that there will be no additional cost to the Exchequer as a consequence of the order. The intention is that the flexibility afforded by the order will be met within budget.

On Question, Motion agreed to.

Harbours Bill [HL]

Lord Berkeley: My Lords, I beg to move that this Bill be now read a second time.
	The Bill has the support of the ports industry, which has identified an anomaly in the Harbours Act 1964. The Bill is intended to remove that anomaly. It will essentially achieve a much needed degree of deregulation for the ports industry by applying the same rules to the maritime sector as are applied to other transport modes.
	The background to the Bill requires some technical explanation. Sections 14 to 16 of the Harbours Act 1964 empower the Secretary of State to make harbour orders. Such orders are required, for example, to establish or reconstitute harbour authorities or to confer on existing harbour authorities additional powers to construct harbour works or to manage their harbours.
	The procedure for making harbour orders is set out in Schedule 3 to the 1964 Act. Schedule 3 provides for objections to the making of a proposed harbour order to be sent to the Secretary of State within a six-week period from the time the proposal is advertised. Where such an objection is made and not withdrawn, the Secretary of State must—and I emphasise "must"—hold a public inquiry to consider the proposal unless he determines that the objection is trivial or frivolous. The result is that a public inquiry must be held even if there is only one outstanding objection, unless the Secretary of State determines that the objection is trivial or frivolous. Secretaries of State rightly rarely categorise objections as such. An objection made by a local resident who expresses a concern is unlikely to be determined to be trivial or frivolous.
	In a number of cases, a single outstanding objection to an order has necessitated the holding of a public inquiry, which clearly gave rise to considerable expense and delay. I shall briefly quote two examples. The first is the Felixstowe dock and railway harbour revision order. Noble Lords will know that Felixstowe is the largest container port in the United Kingdom and the fourth largest in Europe. The port applied in October 2000 for a harbour revision order to authorise major new harbour works of considerable local and national significance. By November 2001, all but one of several objections had been withdrawn, following provision of appropriate assurances and undertakings to bodies such as the Environment Agency and the Royal Society for the Protection of Birds. As a result of a single outstanding objection, lodged and maintained by a local resident, a public inquiry took place over seven sitting days, resulting in the making of the order being delayed until October 2002, which was nearly a year later. In his decision, the Secretary of State stated:
	"The project should proceed for imperative reasons of overriding public interest".
	The industry's view is that if the Secretary of State had been able to deal with the objection by written representations, as provided for in the Bill, it is likely that the order could have been made in or around February 2002, avoiding considerable delay and substantial costs.
	My second example is the Whitehaven harbour revision order 1996. In 1995, the Whitehaven harbour commissioners applied for a revision order to authorise the construction of a lock and other harbour works as a key part of an urgently needed scheme for the regeneration of Whitehaven town and the area. Objections were made by holders of harbour bonds, which had been issued in the 19th century to finance port expansion. The bonds had virtually no market value. By the time of the order, Whitehaven harbour was very little used and heading towards insolvency. However, the bond holders objected to the order on the ground that the effects of the work would undermine the commercial value of their bonds. Following discussions with the Whitehaven harbour commissioners, three bond holders refused to withdraw their objections, in the knowledge that their action would lead to a public inquiry, therefore resulting in a delay that would have led to the loss of European Community funding.
	As a condition of withdrawing their objections, they required that their bonds should be purchased at considerably more than their minimal market value. To resolve the issue, a number of private individuals contributed money to purchase the bonds and the order was eventually made in June 1996.
	In that example, the current system was used to hold to ransom a public project of considerable local economic significance. The situation would not have arisen if the Secretary of State had had the power to consider their objections by means of written representations. The port industry feels strongly that the present position is unsatisfactory and that the Harbours Act 1964 requires amendment. I understand that there is no proposal to include in the next parliamentary Session a transport Bill that could be a suitable vehicle for such an amendment. I also understand that officials have given no indication of when parliamentary time could be found for a government Bill to achieve this. Hence this Bill tonight.
	The Bill would bring the procedure for the making of harbour orders into line with the procedures for the making of highways or transport and works orders. The Secretary of State would retain a discretion to hold public inquiries in all cases. Where an objection was made by a relevant local authority or by a person whose land was proposed to be compulsorily acquired and who requested a hearing, the Secretary of State would be required to hold either a public inquiry or a public hearing. In other cases, the Secretary of State would have the discretion, instead of holding a public inquiry or public hearing, to deal with the objection by written representations.
	Neither the Highways Acts nor the Transport and Works Act 1992 expressly provide that, where objections have been made and sustained and where the Secretary of State has decided to proceed without an inquiry or hearing, he must deal with those objections by means of written representations. However, both those Acts provide that, in such circumstances, the Secretary of State must consider those objections. As a matter of practice, the Secretary of State will consider any further written representations made by the objectors and the applicant to the order when those representations are volunteered or made at his invitation. A similar procedure for written representations would follow on the enactment of the Bill when read with paragraph 19(1)(d) of Schedule 3 to the Harbours Act 1964, which provides that the Secretary of State must consider any objections which are made and not withdrawn.
	On the matter of consultation, the RSPB generally supports the Bill, which is most welcome. Its briefing states:
	"The RSPB has no objection to mounting strong opposition to port development proposals where we believe that the environmental damage which they will cause cannot be justified, but equally we have no wish to see unnecessary constraints and costs imposed upon the ports industry. That is why we support the Harbours Bill".
	The ports authorities welcome that objective view from the RSPB.
	Before closing, there are two matters that I should mention. First, the Bill is consistent with the provisions of the Human Rights Act 1998, because it will apply similar measures to other legislation. In the case of a landowner whose land is to be subject to compulsory acquisition by means of a harbour order, his right to require a public inquiry will be maintained.
	Secondly, the Bill would appear to extend to Scotland. However, that cannot be so. After the passing of the Scotland Act 1998, harbour matters in Scotland, such as the subject matter of this Bill, no longer fall within the competence of the Westminster Parliament but must be dealt with in the Scottish Parliament. If the Bill is given a Second Reading, an amendment will be proposed in Committee to make it clear that the Bill does not extend to Scotland.
	In conclusion, if the Bill is enacted, it will enable the Secretary of State to exercise his discretion in appropriate circumstances to speed up the process for making orders under the Harbours Act. It will reduce red tape and will be welcomed by the ports industry. I ask your Lordships to give the Bill a Second Reading. I commend the Bill to the House.
	Moved, that the Bill be now read a second time.—(Lord Berkeley.)

Lord Greenway: My Lords, I wish to support the noble Lord, Lord Berkeley, in the aims behind this admirably short Bill. I should declare an interest, having worked as a consultant in the ports business for some 12 years, although I have not worked in any UK port in the past two years. As a result of that work, I am fully aware of the frustrations that some ports have had over the years in relation to objections with their harbour revision orders.
	The Bill is concise in its aims and will simplify procedures for ports. I hope that its use of alternative ways in which to deal with objections, through public hearings or written representations, will get round the ridiculous situation of having to have enormously costly and lengthy inquiries for even one objector.
	I recall that some years ago, with another Bill relating to ports, the objections came more from another place. That Bill was held up for a considerable time by Members filibustering in another place all night and even, at one stage, imitating bird calls to each other.
	As the noble Lord said, Felixstowe is a major container port. It has been extremely successful, but it might not have been as successful if your Lordships had not thrown out a Bill in 1979 which would have brought it into the dock labour scheme. It survived without union labour and went from strength to strength. Your Lordships played some part in the success of Felixstowe.
	The trade associations in the port industry are very much behind the Bill. I wish it well and sincerely hope that the Government give it a fair wind.

Lord Bradshaw: My Lords, I support the Bill. I think that it is a useful and necessary deregulatory move and am pleased to associate these Benches with it. The opportunities available to objectors of a minor nature, or who simply use various ruses to delay very necessary works after exhausting the normal democratic channels, need to be expunged as much as possible from the statute book. Very many schemes, not just in ports, suffer from the problem.
	I am pleased to support the Bill and will support other moves to allow the overruling of individuals or small groups of objectors to harbours and other schemes that have clear public benefits and have gone through the normal democratic channels.

Lord Luke: My Lords, we are very grateful to the noble Lord, Lord Berkeley, for sponsoring the Bill on behalf of the British Ports Authority and the United Kingdom Major Ports Group. As he said, the aim of the Bill is to streamline procedures for handling objections to orders concerning harbour works. It is a technical measure designed to give the Secretary of State more discretion in deciding whether to hold a public inquiry when objections to a particular scheme are made, or whether to allow a hearing or receive written representations instead.
	The Bill is designed to bring harbour procedures into line with more recent arrangements under the planning system, namely the Town and Country Planning Act 1990 and the Transport and Works Act 1992. Those allow hearings and written representations as alternatives to a public inquiry. That avoids unnecessary formality and expense, unless of course the Secretary of State feels a public inquiry to be the appropriate way forward. Here I should like to ask the noble Lord, Lord McIntosh, whether the Government believe that the proposed changes in the Bill are likely to be compatible with the forthcoming planning Bill.
	I have a few more questions for the noble Lord, Lord McIntosh. I am very glad to hear from the noble Lord, Lord Berkeley, that the RSPB is happy with the Bill as it stands. Have any other agencies concerned with the environment expressed views on the Bill? I am thinking of CCW, CADW and English Nature. As I am sure that the Minister is aware, environmental issues affecting estuaries and harbours have been the cause of great concern in the recent past. I would like to be reassured that they will always be taken into account when harbour orders are in contemplation.
	The comments of the noble Lord, Lord Berkeley, indicate that he is aware of the position with regards to Scotland. As the Scottish Parliament now has responsibility for these matters, is the Scottish Parliament about to introduce a Bill to bring the situation there into line with the one that will prevail in England and Wales when this Bill is passed?
	We on these Benches believe that the Bill is sensible and will make procedures for harbour orders more efficient and probably more cost effective. We therefore support it.

Lord McIntosh of Haringey: My Lords, I congratulate my noble friend Lord Berkeley on introducing this modest Bill and on the universal approval that he has gained for it. The Government support the Bill's objective. That objective is to streamline the procedure for handling objections to harbour orders. It is a simple technical measure which will bring harbour order procedures into line with more recent arrangements—for example, under the planning system.
	Harbours in this country are managed by harbour authorities, which act as statutory undertakers, with powers conferred originally by private Acts of Parliament. The powers have been used to authorise the original construction of the port and to enable the harbour authority to regulate the safe and efficient use of its facilities. Harbour authorities are, of course, subject to a body of general legislation but their local powers remain important to the operation of our ports.
	The harbour authorities need to be able to revise their powers from time to time to keep them up to date and to meet new needs. It may be appropriate to change the constitution of a harbour authority, or to move the harbour limit, or to update the powers it has to make by-laws and other local regulations.
	New powers are also needed to authorise harbour works—mainly because works in tidal waters interfere with rights of navigation; and because the authority's regulatory powers have to be statutorily extended to any new facilities. A harbour empowerment order is occasionally proposed to create a new harbour authority.
	Until 1964, a harbour authority's statutory powers could be revised only by private Act. The Harbours Act 1964 created a procedure to make harbour orders. These are statutory instruments made by the Department for Transport. The 1964 Act may have seemed modern in its day, but it has been overtaken on best procedural practice—notably by the Transport and Works Act 1992. This Bill would bring it up to date.
	The procedure for making a harbour order begins with an application from the harbour authority, or would-be harbour authority in the case of an empowerment order. Applications are advertised so that people have a chance to object or make representations. That is important, particularly in the light of the question put by the noble Lord, Lord Luke, as to who has been consulted. It is entirely right that there should be this opportunity; and that it should be accessible.
	The 1964 Act makes provision for a public inquiry. It states that an inquiry has to be held if there is just one outstanding objection, unless that objection is frivolous or trivial.
	Inquiries are, however, disproportionate in some cases. Harbour authorities can be deterred from making changes by the delay, uncertainty and cost. It is hard to plan a proposal without knowing whether just one objection might lead to an inquiry.
	Inquiries are inaccessible to some objectors—especially ordinary members of the public, who would often find a hearing or written representations less daunting. Only highly organised and well resourced objectors can afford expert representation—although that is not always a good use of their funds. If the promoter is a large enterprise, there is a risk of lack of balance in the way opposing cases are presented. Even when objectors are well resourced and able to afford representation, it is not necessarily a good use of their money.
	The Town and Country Planning Act and the Transport and Works Act allow hearings and written representations as an alternative to an inquiry. I acknowledge the point made by the noble Lord, Lord Bradshaw, that this does not always work as quickly, efficiently and fairly as it should do. But these procedures give objectors a full right to be properly heard, but without the formality and expense of an inquiry where that is not appropriate. I am pleased to see that the Bill preserves the right to an inquiry where land is compulsorily acquired or when the objector is a relevant local authority. That is what the Transport and Works Act does. It is very important in terms of satisfying the Human Rights Act.
	A preliminary regulatory impact assessment shows that the change would cost nothing and would benefit ports (and objectors) of all sizes. We now have to move with the noble Lord, Lord Berkeley, to work up a full regulatory impact assessment and, from that, move on to a wider consultation exercise—not with the objective of delaying matters but because there are other bodies apart from the Royal Society for the Protection of Birds which may have a general interest in these matters. A wider consultation exercise would include the bodies to which he referred.
	I can assure the House that the Secretary of State would not use the new discretion to avoid inquiries where they need to be held. There are plenty of precedents from the planning system to guide us on when discretion should be exercised. I see no reason why the proposed planning Bill should make any change to that or cause any difficulty.
	So far as concerns Scotland, the noble Lord, Lord Berkeley, has made it clear that he will withdraw any potential references to Scotland. I do not know what the Scottish Executive will seek to do and, strictly speaking, it is not for me to answer. But we recognise that the Bill would make a useful contribution to our policy of streamlining planning and related procedures, and we wish the Bill well.

Lord Berkeley: My Lords, I am grateful to all noble Lords who have spoken and welcomed the Bill. I am particularly grateful to my noble friend Lord McIntosh for his demonstration of government support which is most welcome.
	I shall not be drawn into discussing the dock labour scheme at Felixstowe of some 25 years ago. I agree with the comment of the noble Lord, Lord Bradshaw, that people may delay projects. Nevertheless, consultation is still necessary.
	I cannot comment on the Transport and Works Act 1992 as regards Scotland, but certainly it does not apply to railways in Scotland, and I do not think that it applies to anything else. If one wants a railway in England, one usually builds it according to the provisions of the Transport and Works Act. However, in Scotland the first private railway Bill has been introduced for the Stirling and Menstrie line. I think I am correct in that regard. However, as I said in my opening speech, I intend to table an amendment to remove any reference to Scotland for the reasons I gave.
	I am grateful for the comments of my noble friend Lord McIntosh about the regulatory impact assessment and the fact that the Government are moving quickly towards a full assessment. I certainly agree that there needs to be wide consultation with the organisations that will be interested in the matter and will wish to participate, along with the ports bodies, in consultation to ensure that everyone agrees that the Bill is worth pursuing. As I say, I am grateful for the support of noble Lords who have spoken. I commend the Bill to the House.
	On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at twenty-eight minutes before ten o'clock.